NOK CORPORATIONCSR REPORT 2020

Artist: Momotaro Title: Chikyu Tengoku (Heaven on Earth)Management Principles

Table of Contents

１．T he Management has to run the Company based on
feelings of love and trust in its employees.
２．The Management has to run the Company while uniting toensure full ventilation without forming any cliques.
３．The Management has to run the Company while making
absolutely incredible efforts against all odds and risks.
４．The Management has to run the Company while pursuing
dreams with management plan.

History of NOK Group03

Message from the President

05

Social Contribution through Products

07

NOK Group’s Products

09

Global Development of NOK Group112019 Financial highlights

132019 Business Highlights

16

Company Profile

CSR and Organization

19

Company NameNOK CORPORATION

Established

December 2, 1939

Relationships between NOK Group’s
Activities and the SDGs

21

Capital23,335 million yen (as of March 31, 2020)

Employees

40,492 (Consolidated, as of March 31, 2020) /3,529 (Non-consolidated, as of March 31, 2020)

Governance Report

23

Corporate Governance

24

Sales

626,800 million yen (Consolidated, FY2019) /239,100 million yen (Non-consolidated, FY2019)

Security Code7240

Social Report

30

Business Lines

Manufacture, purchase, import and sale of seal products,
industrial functional parts, hydraulic and pneumatic
equipment, plant machinery, nuclear power equipment,
synthetic chemical products, electronic products, and various
other products; and the provision of associated services suchas the installation of machinery and devices

Human Rights

30

Labor Practices

31

Fair Operating Practices

39

Quality Assurance

42

Participation in Communities andCommunity Development

47

Environmental Report

51

Environment

51

Data sheet

68

Head Office

We work insidewhat keeps theworld moving

1-12-15 Shiba Daimon, Minato-ku, Tokyo 105-8585, Japan

Contact
About the CSR report in general

Corporate Communication Dept., Corporate Administration Office,
NOK CORPORATION
1-12-15 Shiba Daimon, Minato-ku, Tokyo 105-8585, Japan
TEL: +81-3-5405-6372; FAX: +81-3-5405-6379

About the Environment part of the report

Environmental Control Dept., 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

Third-Party Opinion on CSR Report 2020 74

Editorial Policy
This report has been edited in reference to ISO 26000:2010-Guidance on Social
Responsibility.
●Period Covered
Most of the activities described in this report were carried out in FY2019(April 1, 2019, to March 31, 2020), but some took place in FY2020.
●Organizations Covered
All divisions of NOK CORPORATION and other NOK group companies in Japanand abroad.
●Date of Issue of Japanese Version: October 2020
●Date of Issue of English Version: November 2020

NOK sponsors Paralym Art, organized by Shougaisha Jiritsu
Shien Kikou Association.
Paralym Art is a program that aims to help“disabled artists
leverage their own talent to strive for economic independence.”
Starting in 2020, NOK presents a work of Paralym Art on the
cover page of its CSR report. We interviewed Momotaro, who
painted“Chikyu Tengoku”(Heaven on Earth) for this issue.
“For the last few years, I can’t help feeling that a lot of people are losing their way, having a strong feeling that they are expected to change but unable to find out how to change themselves. We can coexist on this planet by‘striving for harmony’with all living creatures, and we can take action on everything
based on this theme. By doing this, we can enjoy our lives safely and trust each other, thinking,‘The earth is a paradise likeheaven!’I painted this piece with this image in my mind.”

NOK CORPORATION CSR REPORT 20202

NOK Group’s History
NOK is a comprehensive parts manufacturer which will soon cele-of that original factory has been passed down through the genera-in Kobe City in 1941, we have cherished our corporate culture ofing automobiles and motorcycles, to support people’s lives. Taking

brate its 80th anniversary. Since we started as a small-town factory

being ambitious, kept taking on challenges based on our proventechnology, and created a variety of products. Over the years, wehave grown into a highly unique enterprise. The corporate culture

tions. The products we create are used in a variety of fields, includpride in our reputation as a“small-town factory born to be a great

parts manufacturer,”we will continue to manage the NOK Groupin an even more ambitious manner.

From a small-town factory to a global enterprise

Product Catalog

Meeting in Tokyo Plant at the
Head Office

A capital participation agreement was
concluded with Carl Freudenberg KG.

The Head Office building wascompleted.

Fukushima Plant(interior)

Opening ceremony ofGeorgia Plant

Singapore Site
(exterior)

1941〜1950

1961〜1970

1941

1961

The company became listed on
the Tokyo Stock Exchange.

1971

Kitaibaraki Plant started operations.

1966

The Head Office building wascompleted in Shiba-Miyamotocho, Minato-ku (currently Shiba
Daimon), and Head Office was
relocated there.

1973

The first international manufacturing Site was established in
Singapore.

1976

NOK KLUEBER CO., LTD. wasestablished as a company to
manufacture and sell special
lubricants.

1980

A plant for oil seals and mechanical seals started its operations in Georgia, U.S.A.

The company was founded in
Kobe City as the first domestic
manufacturer of oil seals in Japan.

1951〜1960
1954

1960

Head Office and Tokyo Factorywere built, and the company
was relocated to Ota-ku, Tokyo.
A capital alliance agreement
was concluded with Carl
Freudenberg KG in West Germany.

1968

1971〜1980

Fukushima Plant started operation. A sales company for oil
seals was established in California, U.S.A.

1969

NIPPON MEKTRON, LTD. wasestablished as a company responsible for the electronic components business.

1970

Kumamoto Plant started operations.

Thai NOK Co., Ltd. (interior)

1981〜1990
1985

The company name was changed
from Nippon Oil Seal Industry
Co., Ltd. to NOK CORPORATION.

1995

A manufacturing site for seal
products was established in
Wuxi, China.

1986

A manufacturing and sales site
for electronic devices was established in Taiwan.

2002

UNIMATEC CO., LTD. was established.

1988

A manufacturing site for oil seals
was established in Thailand.

2007

SYNZTEC CO., LTD. was established.

1989

A manufacturing and sales company for seal products was established in the U.S.A., jointly with
Carl Freudenberg KG.

Sales (100 million yen)

8,000

7,000

6,000
Great East Japan
Earthquake

5,000
Global financial crisis

2007

2008
The dot-com
bubble burst.

1991

1985
NIPPON MEKTRON
established.

NOK CORPORATION CSR REPORT 2020

SYNZTEC established.

2001

3,000

UNIMATEC established.

2,000

The bubble economy
collapsed.

1,000

1976
NOK KLUEBER established.

1969
1941

4,000

2002

The company name waschanged to NOK.
Former name:
Nippon Oil Seal Industry Co., Ltd.

3SHONAN R&D CENTER (exterior)

1991〜

Head Office and Tokyo Factory

1941
Founded.

Head Office of Freudenberg-NOK
General Partnership (exterior)Signing ceremony of Freudenberg-NOK General Partnership

0
1970

1980

1990

2000

2010

2020
NOK CORPORATION CSR REPORT 20204

Message from the President
Three-year Plan

(FY2020 to FY2022)

Slogan“Flexible response to changes and Re-challenge to be a
Sustainable Company”
Chairman's Initiatives

１ . Moving away from dependence on specific customers-Expansion of sales across businesses and creation of new businesses for awell-balanced mix of customers
２ . Repositioning quality management to origin

President of NOK CORPORATION

３ . Operating practical and effective BCM

Kiyoshi Doi

A three-year plan:Flexible responseto changes and Re-challenge to be a
Sustainable Company

４ . Advancing digitalization that will lead to higher competitiveness and profitability
５ . Implementing management spirit that respects human dignity-Fostering vibrant people and supporting flexible and diverse work styles

focus on to remain a key supplier for customers. This has become

but also aims to be an entity that values to society. We also execute a

In addition, we return to fundamentals in order to aim for outstand-particularly true in the past several years and is now a precondition for

management plan to secure stable growth with in revenue and profit

ing quality, take all possible measures to prevent the occurrence andsustainable business activities. We are promoting sustainable environ-over the medium to long term.

leakage of defective products, establish reliable quality that is trusted

ment management, by way of listening to external opinion such as

Today, the global political climate and the outlook for the global

by customers and work on further improvement and stability of quality.

compliance with government regulatory standards for environmental

economy are becoming increasingly uncertain. The evolution of knowl-

At the same time, as a responsibility of a company with a high market

issues, suggestions from consumers, and high demands from custom-edge and technology and the on-going economic globalization haveshare for many products, we maintain and operate a BCM (Businessers, and positioning response to environmental issues as one of thebenefited countless people, while at the same time problems of pover-Continuity Management) system at a high level in order to ensure amost important management issues. We also intend to make sustainedty, inequality of educational opportunities, religious conflicts and immi-

stable supply of products.

contributions to building a recycling-oriented society by cutting backtive use of the resources available within and outside the company.

The NOK Group considers continuously strengthening its corporate
governance system as one of its business.

To be a company which its stakeholders
can be proud ofgration issues have been widespread, with conflicts constantly occur-

In order to improve our competitiveness and profitability, we areon the use of substances of concern, reducing waste and developing

ring in many regions around the world. The economy is rapidly

urgently promoting the digitization of operations in both manufacturing

environmentally friendly products at the global level. We will also con-

It is important for the NOK Group to create a strong corporate group

deteriorating under the influence of sluggish exports associated withand indirect departments.

tinue to focus on the development of environmentally-friendly productswith high profitability by making technologically-backed unique andsuch as products for fuel cells and water-purifier membrane modules.

socially useful products at low cost and selling such products at rea-

the downturn in overseas economies, natural disasters such as large

Another priority for us is to fully implement a management philoso-

typhoons, and the spread of new coronavirus infection. Although thephy that respects human dignity. Respect for human dignity is one oftiming of recovery in the economy largely depends on when the spreadthe Management Principles of the NOK Group. We aim to build a work-of the new coronavirus infection will abate, it is extremely difficult toplace where all employees can feel that they are growing through their

Local communities are important stakeholders of the NOK Group. In

which is a source of pride and strength for the NOK Group. Our prod-

accurately predict when it will return to normal, thereby heightening

work, and that what they are doing is meaningful and directly or indi-order to continue business activities, we believe that it is essential toucts are used in automobiles, construction machinery, agricultural ma-

the unclear outlook for the future.

rectly linked to the improved performance of their organization or com-work together with the local communities in which we operate forchinery, electronic equipment, office equipment and housing equip-

In such a difficult business environment, we will thoroughly imple-

pany. To that end, we are reviewing and improving measures of orga-mutual harmony and benefit while maintaining good communication

ment, etc., thereby supporting society and people’s daily lives behindment measures to prevent the spread of new coronavirus infection andnizational and personnel systems, education, etc., and are also focusingwith them, as a good corporate citizen. Traditionally, we have been

the scenes.

make efforts to develop and implement a three-year plan for FY2020

on practicing diverse work styles in which each employee can work

engaged in various CSR activities, including local community contribu-

In addition, the NOK Group supports the ideals of the SDGs as athrough FY2022 (Medium-term Management Plan) so that the NOKwith gusto in a safe and secure workplace.

tion activities around the NOK Group's business establishments andgood corporate citizen. We aim to be a company which all of ourGroup can ensure its sustainable growth and development from agroup companies, support for initiatives related to next-generation ed-

stakeholders are proud of as an entity which plays a leading role infar-sighted perspective.

ucation, and social welfare activities. We also seek to build an organi-creating socially useful value added, employment for local communities

zation that encourages open communication and a workplace where

and realizing a sustainable society. In order to achieve these goals, weemployees can work with a sense of fulfillment. This is a part of ourwill respect human rights, comply with related laws, regulations, andefforts to implement a management philosophy that respects humaninternational rules as well as the spirit behind them, and commit to our

dignity.

social responsibility with a strong sense of ethical values, in both do-

The basic policy for us is“Flexible response to changes and Re-challenge to be a Sustainable Company”. In pursuit of bringing profits andpride to all stakeholders, NOK places top priority on steadily continuingbusiness. As the automotive industry moves toward electrification andContinuation of environmental
management and moving forward to ESG
1. Environmental Initiatives

sonable prices. We have been developing our business around this
2. Initiatives within Local Communities

mestic and overseas operations.

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

The NOK Group is a developer, manufacturer and seller of products

trends emerge, including advances in artificial intelligence (AI), we

used in automobiles, machinery and electronic devices, etc., and is

make strong efforts to boost development and sales of new products

committed to environmental conservation activities for energy related

The NOK Group does not only contribute to the development of theand existing products and optimize our customer mix by making effec-

to our products. Safety, Environment and Quality are essential that we

economy and society by creating added value through fair competition,

5

NOK CORPORATION CSR REPORT 2020

philosophy. In fact, NOK Group’s products are in use around the world,

3. Governance Initiatives

NOK CORPORATION CSR REPORT 20206Social Contribution through Products
Humanity is currently facing a wide range of problems.

Some are environmental, such as global warming, worsening water-related problems, an increase in natural disasters and the loss of biodiversity.

Potential Contributions to the SDGs through NOK Group’s Products and Technologies

Others are social, including poverty, unequal educational opportunities, pandemics, various forms of discrimination and conflicts.

There are also economic problems such as increasing economic disparities, economic crises and a lack of funding for social welfare.
The SDGs* were adopted across the world in order to address these problems and challenges.
What can we do to help achieve these goals?

The NOK Group is a comprehensive parts manufacturer that supports the provision of goods and services used in our communities and our lives.
Some examples include the ever-evolving automobile, as well as the now-indispensable smartphone.
What can we do through our products, technologies and business activities? There must be a lot of answers to that.
As the NOK Group,

We work insidewhat keeps
the world moving

Aircrafts
DronesArtiﬁcialsatellites

Marine vessels

Building inspection systems
Oﬃce automation equipment

CamerasRockets

Astronomical
telescopes

Sharing services

Fishing tackles
Industrial robots

Pet supplies

Water puriﬁers

BicyclesProduction facilities
Surveillance / security cameras
Y
TOR
FAC

Next-generation vehicles
Motorbikes

Housing equipment

Platform screen doors

Bullet trains
Construction machinery

Trucks
Personal computers
Smartphones and tablets

Power plants

HOS

Amusement equipment

P I TA

Agriculturalchemicals

L

Agricultural
machinery

Cosmetics
ATMs

Automobiles

Traﬃc signs & safety devices

Medical and healthcare devices

7

NOK CORPORATION CSR REPORT 2020

Smartwatches

Multilingual guidance systems*“SDGs”stands for Sustainable Development Goals. The SDGs, adopted by the United Nations (UN) summit in 2015, are a set of international goals for the UN member statesfrom 2016 to 2030. They consist of 17 goals and 169 targets under the overarching principle,“Leave no one behind”on earth, and active efforts have also been made in Japanto achieve these goals.

NOK CORPORATION CSR REPORT 20208

NOK Group’s Products
Seal BusinessOil seals

O-rings

Industrial rubber products

Rubber vibration /sound isolators

Iron Rubber products

NOXTITE

Oil seals are functional parts used to sealoil. Composed of synthetic rubber, metalrings, and springs, they prevent oil fromleaking from gaps in machine shafts. They
also prevent the entry of dust from theoutside.

O-rings are O-shaped rubber ring gaskets. They are moderately compressedby fitting into grooves of machinery, andprevent leakage of various fluids, including
oil, water, air, and gas.

These are functional parts for industrial
use made of synthetic rubber, such as
dust covers, boots, and diaphragms. We
provide a wide range of products including rubber products as well as rubber-lined
metal and resin products.

A wide variety of vibration and soundisolators are available, including torsional
vibration dampers to reduce crankshaft
vibration in car engines, and a center bearing support to absorb and isolate vibration
by supporting the propeller shafts of rearwheel and four-wheel drive vehicles suchas passenger cars and trucks.

Iron Rubber, an intermediate product between rubber and plastic, demonstrates
excellent performance in resisting abrasion and absorbing shock/vibration. We
provide a wide range of products, including gaskets for machinery pistons andtraffic safety-related products that require
superior durability.

The NOXTITE acrylic elastomer has a number of well-balanced functions, including oil
resistance, heat resistance, high strength,
and resistance to permanent compression
set. In addition to use as a material for oil seals
and O-rings, it is used in devices that require
heat resistance and oil resistance such as
the surrounding surface of car engines.

Main usage

Net sales:

317.0 billion yen

Operating income:24.3 billion yen

Major operating companies: NOK CORPORATION, UNIMATEC CO., LTD.

Electronic Products BusinessNet sales:

283.1 billion yen

Operating income:△12.6 billion yen

Major operating company: NIPPON MEKTRON, LTD.

Roll Business

Automobiles, construction machinery, agricultural machinery, railroad vehicles, steel
mills, industrial robots, aircraft, marine vessels, office machinery, home electronic appliances, etc.

Main usage

Main usage

Main usage

Main usage

Automobiles, construction machinery, agricultural machinery, piping joints, water-proof
cell phones, etc.

Automobile suspension and steering, housing
equipment, etc.

Crankshafts of car engines, propeller shaftsof rear-wheel and four-wheel drive cars, etc.

Construction machinery, automobiles, semi-conductor manufacturing equipment, food manufacturing machinery, traffic safety-related
products, etc.

Single-sided FPCs

Double-sided FPCs

Multi-layer FPCs

Component assembly FPCs

Precision rubber andplastic components

CHEMINOX

They have circuits on one side only.
They are structured to best exhibit the thinand flexible characteristics of FPCs. They
are durable against repetitive bending andcan be mounted on the operating part using less space. They are also suitable formulti-dimensional wiring in narrow gaps.

These have circuits on both sides. Compared to the single-sided version, they
allow for more complex wiring, and contribute to downsizing and weight reduction through the mounting of parts on
both sides. They can also be used for avariety of designs because they are freely
bendable.

These FPCs have realized higher functionality, smaller size, and lighter weight
through multi-layered circuits. Integrated
boards and cables contribute to downsizing, as they require no connectors.

FPCs are very thin films and therefore require a special mounting process. NIPPONMEKTRON not only manufactures FPCs
alone, but also responds to requests for
FPC module units by mounting semiconductors, microchip components, and connectors.

These products are sealing parts to preventthe entry of water and dust by fitting insideof HDDs and smartphones or assemblingon the exterior. Utilizing the technologies
fostered in development and manufacturing processes, MEK also offers productswith additional waterproofing functionality
and anti-shock mechanism (protection) bymolding rubber or resin to FPCs.

This is a fluorine chemistry-based compound with rubber additive, available invarious forms such as powder, liquid, andgas. It is used as a material and a modifier
for rubbers and resins, and provides new
possibilities for materials.

Main usage

Main usage

Main usage

Main usage

HDDs, digital cameras, media players, gamemachines, etc.

Digital cameras, smartphones, automobiles,
medical devices, etc.

Digital cameras, video cameras, smartphones,
etc.

HDD, digital cameras, smartphones, automobiles, etc.

Development rollers andcharge rollers

Fixing belts andpressure rollers

Products for financial terminals

Development rollers are used to send acertain amount of toner to the photoreceptor, and charge rollers are used to apply
a certain amount of electric charge to thephotoreceptor. The electric conductivityof these products is controlled with highprecision.
Main usage
Net sales:

17.9 billion yen

Operating income:

Major operating company: SYNZTEC CO., LTD.

9NOK CORPORATION CSR REPORT 2020

△0.8 billion yen

Surrounding area of the office machinery photoreceptors

Fixing belts are made by combining metal
and rubber, with high heat conductivity andpyrogenicity. Pressure rollers are used toprovide evenly distributed pressure whenfixing toner.
Stable fixing outcomes last a long time.
Main usage
Fixing parts of office machinery

Main usage
Special rubber materials

Main usage

Main usage
HDDs, smartphones, etc.

Other Business Net Sales: 9billion yen

Surface treatment agents, synthetic chemical
products

Operating income:1 billion yen

Major operating company: NOK KLUEBER CO., LTD.

These products are used for financial terminal devices such as ATMs and therefore
require high reliability. Products include
bill-conveying belts that combine highperformance urethane rubber with threads
and textiles, and bill beater rubber with excellent durability.
Main usage
ATMs, cash dispensers, etc.

Oil

Coating

GreaseOur high-performance oil excels in
lubricating performance, heat-resistance, and oxidation resistance, leading to longer machine operating life
and improved efficiency. NKL provides
products suitable for various fields, including for large plants, precision machines, food processing machinery,and semiconductor manufacturing
equipment.

Our coating products offer beneficial
effects such as excellent lubrication
performance, resistance to wear,
non-adhesiveness, and insulation performance, through their application on
the surface of metal parts, including
in environments where grease and oil
cannot be used. They are employedin various fields such as automobiles,
electric appliances, and office machinery.

Our grease features high-reliability andlong-operating life even in severe environments such as extremes in temperature, high-speed, and high-load.
It is used in various fields such as automobiles, industrial machinery, electric
appliances, office machinery, foodmachinery, and semiconductor manufacturing equipment.

NOK CORPORATION CSR REPORT 2020

10

Global Deployment of NOK Group●NOK CORPORATION

Asia

Freudenberg NOK Pvt., Ltd. / India
Thai NOK Co., Ltd. / Thailand
NOK Asia Company Pte. Ltd. / Singapore
PT. NOK Indonesia / Indonesia

KOREA
CHINA

TAIWAN
INDIA

JAPAN

VIETNAMMALAYSIAINDONESIA●SYNZTEC CO., LTD.

Head Office (Minato-ku, Tokyo)
Fujisawa Plant/Shonan R&D Center (Fujisawa City, Kanagawa Prefecture)

Wuxi NOK-Freudenberg Oil Seal Co., Ltd. / China

Fukushima Plant (Fukushima City, Fukushima Prefecture)

NOK(Wuxi) Vibration Control China Co., Ltd. / China

Nihonmatsu Plant (Nihonmatsu City, Fukushima Prefecture)

Changchun NOK-Freudenberg Oil Seal Co., Ltd. / China

Kitaibaraki Plant (Kitaibaraki City, Ibaraki Prefecture)

NOK-Frendenberg Group Sales (China) Co., Ltd. / China

Tsukuba Plant (Tsukuba City, Ibaraki Prefecture)

NOK-Freudenberg Hong Kong Ltd. / China

Shizuoka Plant (Makinohara City, Shizuoka Prefecture)

Taicang NOK-Freudenberg Sealing Products Co., Ltd. / China

Tokai Plant (Kikukawa City, Shizuoka Prefecture)
UNITED STATES OF
Tottori Plant (Saihaku-gun, Tottori Prefecture)
AMERICA
Kumamoto Plant (Aso City, Kumamoto Prefecture)

NOK Wuxi Vibracoustic China Co., Ltd. / China
Pyung Hwa Oil Seal Industry Co., Ltd. / South Korea●NIPPON MEKTRON, LTD.

●NIPPON MEKTRON, LTD.

Head Office (Minato-ku, Tokyo)

Mektec Manufacturing Corporation (Thailand) Ltd. / Thailand

Ushiku Plant (Ushiku City, Ibaraki Prefecture)

Mektec Precision Component (Thailand) Ltd. / Thailand

Kashima Plant (Kamisu City, Ibaraki Prefecture)

NOK Precision Component Singapore Pte. Ltd. / Singapore
Mektec Manufacturing Corporation (Zhuhai) Ltd. / China

SINGAPORE●NOK CORPORATION

Vietnam NOK Co., Ltd. / Vietnam

NOK（Wuxi）
Water Treatment Technology Co., Ltd. / China
THAILANDJapan

Mektec Manufacturing Corporation (Suzhou) Ltd. / China
Mektec Corporation / Taiwan
Mektec Manufacturing Corporation (Vietnam) Ltd. / Vietnam●SYNZTEC CO., LTD.

Head Office (Minato-ku, Tokyo)
Yokosuka Plant (Yokosuka City, Kanagawa Prefecture)●NOK KLUEBER CO., LTD.

Head Office (Minato-ku, Tokyo)

Synztec (Malaysia) Sdn. Bhd. / Malaysia

Kitaibaraki Plant (Kitaibaraki City, Ibaraki Prefecture)

Synztec Vietnam Co., Ltd. / Vietnam

FUKUSHIMA●UNIMATEC CO., LTD.

Synztec Precision Parts (Shenzhen) Co., Ltd. / China

Head Office (Minato-ku, Tokyo)

Synztec Precision Parts (Shanghai) Co., Ltd. / China

IBARAKI

Plant No. 1 (Kitaibaraki City, Ibaraki Prefecture)●UNIMATEC CO., LTD.

TOTTORI

Unimatec Singapore Pte. Ltd. / Singapore

KANAGAWA

North America

NOK Group Head Oﬃce
TOKYO

SHIZUOKA

EuropeKUMAMOTOGERMANY

UNITED STATES OF
AMERICAGroup Company
KOREA

Japan

Miyagi NOK Corporation (Kami-gun, Miyagi Prefecture)
CHINA
NOK Metal Co., Ltd. (Toda-gun, Miyagi Prefecture)
Tenei Seal Industry Corporation (Iwase-gun, Fukushima Prefecture)
Miharu Industry Corporation (Tamura-gun, Fukushima Prefecture)
TAIWAN●NOK CORPORATION

Freudenberg-NOK General Partnership / U.S.A.

●NOK CORPORATIONNOK Europa GmbH / Germany
Unimatec Chemicals Europe GmbH / Germany●NIPPON MEKTRON, LTD.

Mektec Manufacturing Corporation Europe DE GmbH / Germany

11 NOK CORPORATION CSR REPORT 2020

JAPAN Corporation (Fujisawa City, Kanagawa Prefecture)
Kanasei
MYK Corporation (Makinohara City, Shizuoka Prefecture)
Kikugawa Seal Industry Co., Ltd. (Kikugawa City, Shizuoka Prefecture)
TVC Co., Ltd. (Saihaku-gun, Tottori Prefecture)
Saga NOK Corporation (Ureshino City, Saga Prefecture)

Tohoku Seal
Industry Corproration (Yama-gun, Fukushima Prefecture)
INDIA

Tos NOK Corporation (Miyaki-gun, Saga Prefecture)

Prefecture)

Kumamoto NOK Corporation (Aso City, Kumamoto Prefecture)

Nihonmatsu Seal Industry Corporation (Nihonmatsu City, Fukushima

THAILAND
Isohara Polyurethane Industry Corporation (Kitaibaraki City, Ibaraki
VIETNAM
Prefecture)

Kusu NOK Corporation (Kusu-gun, Oita Prefecture)
Aso NOK Corporation (Aso City, Kumamoto Prefecture)
Nichinan NOK Corporation (Nichinan City, Miyazaki Prefecture)

Isshin Industries Corporation (Saku-gun, Nagano Prefecture)

MALAYSIASINGAPORE
INDONESIANOK CORPORATION CSR REPORT 202012

2019 Financial Highlights
Financial Highlights (Consolidated) over the Last 6 Years
FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

FY 2019

Net sales(million yen)693,689

746,147

713,138

729,341

669,482

626,815

Operating income(million yen)

67,08548,25839,77644,934

23,14012,028

(%)

9.7

6.5

5.6

6.2

3.5

1.9

(million yen)

80,76653,72745,70956,291

31,135

17,373

Ordinary income to
net sales ratio

(%)

11.6

7.2

6.4

7.7

4.7

2.8

Profit attributable toowners of parent(million yen)

Operating income to
net sales ratio
Ordinary income

Net income to net sales ratio

46,813
6.7(%)

30,053
4.0

27,3283.835,281
4.8

3,419
0.5

△ 2,218-

ROE (Return On Equity)

(%)

12.4

7.4

6.7

8.0

0.8

△ 0.5

ROA (Return On Asset)

(%)

6.6

4.1

3.8

4.6

0.4

△ 0.3

EPS (Earnings Per Share)

(yen)

271.2

174.0

158.4

204.2

19.8

△ 12.8PER (Price Earnings Ratio)(times)

13.4

11.1

16.3

10.1

87.2

△ 93.0Total assets(million yen)

755,084

696,989

751,797

793,314785,133

728,695

Owner’s equity(million yen)

421,894

395,444418,666

459,655444,177

407,092

(%)

55.9

56.7

55.7

57.9

56.6

55.9

41,47061,39965,13558,38870,11847,669Financial position

Capital expenditure
Depreciation(million yen)

32,963(million yen)

40,15640,391

43,991

46,84843,300(million yen)

8,096

7,632

8,274

9,443

10,45911,298Dividend

(yen)

50

50

50

50

50

37.5

Payout ratio

(%)

18.4

28.7

31.6

24.5

252.9

-

Operating activities(million yen)

80,61388,50368,03869,52663,854

71,370Investing activities(million yen)

△ 43,196△ 65,682△ 62,035△ 58,681△ 79,259△ 50,425

Financing activities(million yen)

△ 18,061△ 24,008△ 7,327△ 13,010

6,633△ 17,497

Cash and cash equivalents,
end of period(million yen)

102,339

94,032

90,62989,42080,761

82,366Net R&D expenditure(million yen)(%）

800,000

１６

700,000

14

626,815600,000

12

500,000

10

400,000

8

300,000

6

Net sales

200,0004

 perating
O
income1.9％

100,000
0

Profitability

Equity ratio

Changes in net sales and operating income

12,028
03

04

05

06

07

08

09

10

11

12

13

13

14

(References)*

15

16

17

18

19

(FY)

(Results)

20

 perating
O
income tonet salesratio＊ Since FY 2014, NOK has unified the accounting period of the overseas business and changed its depreciation method. Therefore, the values are for reference purposes only.

Analysis of Operating Results
Fiscal 2019 operating results
Regarding the business environment surrounding the NOK Group in
fiscal 2019, the Japanese economy faced a rapid downturn due tosluggish exports owing to a slowdown of overseas economies, the effects of large typhoons, as well as the impact of the novel coronavirus

In the electronic equipment industry, the production volume ofsmartphones, HDDs, and digital cameras declined.
In the office machinery industry, production volume was almost flat
despite a growth in demand for color printers and copiers.

outbreak. Other countries also faced a rapid economic slowdown as

Under these circumstances, the Group posted the following results:

companies around the world shut down their production activities due

Net sales totaled 626,815 million yen (down 6.4% year on year); oper-

to the impact of the novel coronavirus. The coronavirus pandemic has

ating income was 12,028 million yen (down 48.0% year on year); andbeen raising uncertainty in the global economy as a whole.

ordinary income amounted to 17,373 million yen (down 44.2% year on

In the automobile industry, demand remained robust in Japan due toyear), resulting in 2,218 million yen in loss attributable to owners of

the limited impact of the consumption tax hike. Meanwhile, demandparent (compared to a profit attributable to owners of parent of 3,419

remained weak in the Chinese and North American markets.

million yen in the previous fiscal year).

Shareholder return

Cash flows

13 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 202014

2019 Business Highlights
FIscal 2019 overview by business segment
Roll Business
17,807

Biological rubber electrode

Other
Business■ Seal Business

1.4%

of automobiles and general industrial machinery. As a result, net

8,962

2.8%

New Product Introduction

sales ended at 316,966 million yen (down 7.2% year on year).
Operating income amounted to 24,290 million yen (down 32.9%

Net sales

year on year) primarily due to a decline in net sales.

626,815(million yen)

80,000316,966

300,000
200,000

Electronic
Products
Business

Seal
Business

100,000

45.2%

50.6%

■ Net sales

316,966

283,079

0

2015

2016

2017

2018

2019 (FY)40,00020,000

Sales decreased due to a decline in demand from manufacturers

Sales declined due to the impact of the novel coronavirus out-of smartphones and digital cameras. As a result, net sales ended

break as well as a drop in demand for printer components andat 283,079 million yen (down 4.8% year on year).

unfavorable exchange rate movements. As a result, net sales

Operating loss totaled 12,600 million yen (compared to an op-

stood at 17,807 million yen (down 11.3% year on year).

erating loss of 14,151 million yen in the previous fiscal year) due

Operating loss came to 751 million yen (compared to an oper-

to decreases in personnel expenses and depreciation and amor-

ating loss of 129 million yen in the previous fiscal year) due totization costs.

the effect of the decline in sales.

500,000

80,000375,000

283,079

250,000
125,000-12,600

0
2015■ Net sales

2016

2017

2018

■ Operating income

2019 (FY)60,00040,00020,0000-20,000

Repeatable use

NOK's material technology provides ethanol
resistance and physical strength to reduce vulnerability to degradation due to moisture and/or drying.

Excellent
flexibility

The rubber product fits snugly onto the bodysurface, and hence, is less likely to cause afeeling of discomfort when you wear it.

Sotto Series product lineup■ Operating income■ Roll Business(million yen)

Enable to monitor biological signals without
the use of conductive adhesive or gel.

0

■ Electronic Products Business(million yen)

the point that we want to make is that the product softly snuggles up
to you.

60,00024,290Operable inarid conditions
Electrodes made of conductive rubber that can measure and monitor biological signals such as brain waves, electrocardiogram, electromyogram, and bioaccumulating electric charge. As its naming shows,(million yen)

400,000

million yen

Characteristics of Sotto Series products

Sales decreased due to a decline in demand from manufacturers(million yen)

Sotto Connect that is easy to connect anddisconnect

Sotto Fabric with the softness of fabricPipette packing

Easy, safe and economical to use(million yen)

30,000

Sotto Brain neither needs topical application
nor involves pain.

3,000

17,80720,000

2,000
1,000

10,000-751

02015■ Net sales

2016

2017

■ Operating income

20182019 (FY)0

Pipette Packing is a pipette tip packing designed to be placed at theleading end of a pipette tip so that you can inject reagent directly into
small-sized devices such as micro-flow passages.

-1,000Characteristics of Pipette Packing
・Reduction of the required amount

Enable direct injectionof reagent
into micro-flow passag・Providing enough ground for thees, hence leading to:automation of reagent injection

Made of low-dissolution materials, hence
leading to:・Less impact on experimental results・High resistance to acids and alkalis

Autoclave-compatibility ・Facilitating cell culture in a secure
which leads to:manner
The product prevents liquid spill during injection, thereby attaining easyand secure injection of reagent.

15 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 202016

Recycled plastic products

Activities through sports[Recyclable median strip block]

NOK CORPORATION hires its firstathlete employee.

NOK Kitaibaraki Plant manufactures traffic signs & safety devices(TSSD) as typified by safety cones.

Held Sports Festival
The“NOK Group Sports Festival 2019”was held in June 2019 forWith a strong desire to contribute to society through sports and as

the purpose of fostering friendship and harmony among employees.

Our TSSD products are based on Iron Rubber (special polyurethanepart of our social contribution activities, the company hired swimmer

Under the slogan of "Building Group Bonds through Sports," it was arubber) from NOK that has a high reliability and a proven track record

Rintaro Okubo in April 2019, taking advantage of the Athlete Naviga-

large event attended by more than 3,000 employees from the NOKof use as material for a wide variety of mechanical parts. Our TSSD

tion System (Athnavi), a program run by the Japanese Olympic Com-

Group's domestic business establishments and group companies.

products offer superior durability as shown by the fact that they main-

mittee (JOC) to offer job search support for top athletes. In October,tain high quality and superb functionality in an outdoor environment for

we also hired swimmer Yukina Hirayama. Both athletes, while pursuing

an extended period of time. Among others, for the production of medi-

their athletic career, are also involved in public relations work as NOK

an strip blocks whose main purpose of use is to separate the vehicle

employees, as well as in conducting workshops to promote employ-lane of a road into two tracks, we have established a recycling system,

ees’health. Going forward, we will develop a work environment inand with the endorsement thereof from purchasers, we have success-which we can apply social contribution activities through sport events

fully increased the ratio of recycling of used products as recovered toand the experience that we have gained from athletic activities to

98% or more. We have the product JIS (JIS A 9401: 2007)-approved as

improve the quality of the NOK products and our service.

a recycled-material-based product.

Entering a member ofthe selected relay
team.

In addition, it is important to note that the product falls into Specified
Procurement Items under the Act on Promoting Green Purchasing andis qualified under the Ibaraki Prefectural Certification System of Recycled Products, thereby contributing to the promotion of adequate cyclic use of recycled resources and waste reduction.

Taking an oath of the
sports festival

FPC board for voltage monitoring[FPC from NIPPON MEKTRON that contributes
to automobile electrification]Asautomobile

electrification

advances,

automotive

vehiclesequipped with lithium-ion batteries are increasing at an accelerated
pace. Such a lithium-ion battery undergoes constant monitoring of its
voltage and temperature to prevent its runaway, heat generation, andHirayama won the 100m butterfly at the 2nd Japanese Adult Swimming
Championships in November.

abrupt deterioration. Heretofore, this monitoring has been performed
in a way that a large amount of current the battery cell is connected toWas on the community
FM radio station "Radio
Tsukuba" in Tsukuba
City, Ibaraki Prefecture.

the wire harness through a busbar.
NIPPON MEKTRON suggests that the size, thickness, weight, andcost of the battery can be reduced by using an FPC board as an alter-

Ball-rolling race

Cosponsored the “Iki-Iki Ibaraki Yume
Kokutai 2019”(National Athletic Meet)
The NOK Group, which has several sites in Ibaraki Prefecture, cosponsored the“Iki-Iki Ibaraki Yume Kokutai 2019”(National Athletic

native to the wire harness. This idea has become technologically feasi-

Meet) to contribute to the local community. We set up a public rela-ble by ensuring the long-term reliability of the connection between thetions booth at Kasamatsu Sports Park (Hitachinaka City), one of the

FPC board and the busbar and by taking advantage of the features ofvenues, and our volunteer employees participated and danced in a

FPC board such as thinness, light weight, flexibility, and ease of mount-pre-ceremony performance, which enlivened the event.

ing components.
Example of FPC-based voltage monitoring circuit for lithium-ion battery

A workshop for NOK
employees conductedwith the theme of "Five
Minutes Health Management Method a Day".

17 NOK CORPORATION CSR REPORT 2020

Set up a public
relations booth

NOK CORPORATION CSR REPORT 2020

18

CSR and Organization
Concept of CSR

CSR Promotion System

As stated in the Charter of Corporate Behavior, the NOK Group as-

environmental, social and governance aspects of corporate social

The CSR Committee was organized in October 2016 topires to drive the realization of a sustainable society while operating

responsibility (CSR) is an integral part of continuous business activities.

increase the awareness of CSR throughout the company

its business in a way that makes our stakeholders proud to pursue

We also value communication with stakeholders as an effective way

and to promote CSR activities more effectively.

their dreams with us.

to broadly examine the business climate and situation, as well as to

All of our business activities are founded upon the NOK Charter ofidentify business risks and opportunities.

Committee
members

Corporate Planning Dept.,
Environment Management
Dept, Procurement Control
Dept., Legal Affairs Dept.,
Personnel Dept., Safety &Health Promotion Dept.,
Corporate Communication
Dept., Accounting Dept.,
Corporate IT Infrastructure
Dept., Engineering Administration Dept., Sales Administration
Dept. and General Affairs Dept.

nal committees and divisions and oversees companywide
CSR activities. It also disseminate information externallyand Principles of Corporate Behavior). We believe that fulfilling theincluding the issuance of the CSR Report.

Seven Core Subjects

General Manager of Corporate
Administration Office

The CSR Committee collects reports from related inter-

Corporate Behavior (Management Principles, Management Policies,NOK’s Efforts

Board of Directors

Committee
chairperson

Mainly related SDGs

Reports and Proposals

Approval

CSR Committee
ReportRelated Internal Organizations
Central Environmental
Conservation Committee
Internal Control Audit
Committee
Risk Management
Committee
BCM Committee

Information Security
Committee
Divisions
Safety and HealthCommittee
Labor-Management
CouncilStakeholders

Corporate Governance

GovernanceCorporate
GovernanceCompliance
Risk Management

Human Rights

Respect for Human Rights

Respect for Fundamental Rights and Dialogue

Suppliers

Development of Human Resources

Labor Practices

Diversity
Human Resources and Welfare Systems

Principles of Corporate Behavior

Society

Employees’Safety and Health

Fair Operating Practices

Management Initiatives
Quality Assurance
Participation in Communities

Management Principles

and Community Development

Compliance with Fair Operating Practices

Local
Community
and Society

Supply Chain Management

Product Quality and Safety

Shareholders
・
Investors

Fundamental Concept

Fundamental Concept
Environmental Management System

Sustainable Society

NOK Charter ofCorporate Behavior

Customers

Employees

Measures against Climate Change

Environment

Environment

Waste and Recycling
Conservation of Water Resources
Measures on Substances of Concern
Environmentally Friendly Products

Financial
Institutions

Conservation of Biodiversity

19 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

20

NOK Group’s Activities and SDGs
The NOK Group's activities to date have contributed to the achievement of the Sustainable Development Goals (SDGs) adopted by the United Nations.
The results of linking the NOK Group's activities to SDG targets are listed here.
We will continue contributing to solving the social issues surrounding us.

Corporate
Governance

Governance

Human Rights

3.4
3.6

Labor Practices

4.4

5.1
5.5

8.5
8.8

5.1
5.4
5.5

8.5
8.8

Participation in
Communities andCommunity
Development

Environment

12.2
12.5

10.2

2.1

3.4

4.4

Environment

9.5

6.3
6.4

7.2
7.3

16.2
16.4
16.5

17.17

12.4
12.5

9.5

Quality Assurance

17.16
17.17

10.2
10.3

Fair Operating
Practices

Society

16.5
16.7
16.b

9.4

17.16

11.4

11.6

14.1
12.2
12.4
12.5
12.6

13.1

14.1

17.17

15.4

17.17

Details of Our Efforts
Corporate
Governance
Human Rights

Goal 16：Efforts of building up a compliance/governance system and pursuing initiatives against corruption

Goal 2：Activities such as food distribution to needy families

Goal 17：Corporate management commitment and initiatives that takes into account the benefits of all stakeholders

Goal 3：Supporting sporting events and school-sponsored sporting events

Goal 5：Advancement of female employees
Goals 8 and 10: Respect and commitment to basic human rights related to employees
Goal 3：Promoting welfare benefits and the health of employees

Labor Practices

Fair Operating
Practices

Goal 4：Educational support for elementary schools and acceptance of interns from universities and technical colleges
Goal 9：Pursuit of activities to cultivate an environment that can form the foundation of innovation such as NHK College Student Robocon, Kids
Engineer, and Student Formula Japan Tournament

Goal 11：Becoming involved in the preservation of traditional culture and temples

Goal 4：Providing education and training programs and implementing human resource development

Goal 14：Cleaning activities at the seaside

Goal 5：Promoting active social participation by women and maintenance of work-life balance

Goal 17：Cooperation with various organizations

Goal 8：Undertaking the task of providing a safe and comfortable working environment for employees

Goal 6：Prevention of water pollution and implementation of necessary measures in water-stressed areas

Goal 10：Formulation and implementation of a fair procurement policy

Goal 7：Enhancement of energy efficiency and introduction of renewable forms of energy

Goal 12：Implementation of Green Procurement

Goal 9：Improvement of resource efficiency, introduction of anti-pollution technology and development of environmentally friendly products

Goal 16：Implementation of CSR-based procurement

Goal 11：Management of hazardous substances and waste

Goal 17：Creating a new partnership with external organizations, companies, etc. in the supply chain
Goal 9： Promotion of innovation by setting forth the improvement of our unique technologies in our basic policy centered around "product quality and safety"

Quality Assurance

Participation in
Communities
andCommunity
Development

Goal 12： Promotion of reduction of waste loss by declaring to that effect in the Group Quality Assurance Policy
Goal 17： Creating a new partnership with external organizations, companies, etc. in the supply chain and delivery destinations

21 NOK CORPORATION CSR REPORT 2020

The Environment

Goal 12：Reduction of input energy (natural resources), management of input resources and emissions in the course of business operations, anddisclosure thereof in the relevant CSR report at regular intervals

Goal 13：Response to climate change
Goal 14：Management of water discharge effluent and cleaning activities at the seaside
Goal 15：Formulating the NOK biodiversity conservation policy and carrying out such activities as tree planting
Goal 17：Implementing environmental programs in coordination with significant participants in the supply chain, including Kyoeikai and Kyoryokukai

NOK CORPORATION CSR REPORT 202022

Governance

Governance

Governance Report

Corporate GovernanceCorporate Governance
The NOK Group aims not only to contribute to the developmenttion, but also to become a company useful for society at large by
promoting management that can make all stakeholders proud of thecompany and continue pursuing their dreams together. In addition,

we are promoting our management plan to ensure stable growthand stable earnings in the medium- to long-term.

Corporate Governance Systemfair 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

the corporate auditors, including external auditors, audit manage-

ment. The Board of Directors and the Board of Corporate Auditors,
which include personnel from outside the company, are the key tostrengthening the checking function.
In order to improve objectivity and transparency regarding nomination and remuneration, the Board of Directors has establishedthe Management Oversight Council with key members from outside

the company as an advisory body to the Board of Directors, which
regularly confirms important matters such as nomination and remuneration and provides appropriate advice to the Board of Directors.
In addition, significant management risks are checked and as-

sessed at the Management Oversight Council periodically.
The Internal Control Audit Committee, an advisory body to the

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.
Enacted on May 1,2006, revised on July 1, 2019

Management Principles
1. The Management has to run the Company based on
feelings of love and trust in its employees.
2. The Management has to run the Company while uniting
to ensure full ventilation without forming any cliques.
3. The Management has to run the Company while making
absolutely incredible efforts against all odds and risks.
4. The Management has to run the Company whilepursuing dreams with management plan.

Appoint/Remove

Appoint/Supervise

Discussionof importantmatters andreporting on
the executionof businessAppoint/Remove
Audit・
ReportBoard of Corporate Auditors
Five auditors (including threeexternal auditors)

ReportAppoint/Remove
ReportInformation
Exchange

Consult
ReportAccounting Auditor

Internal Control
Audit Committee

1. Provision of Socially
Useful Products

We will develop and provide socially useful and safe products through the creation of new value, and provide pertinent
information regarding products and have sincere dialogues with end users and customers while also working to achievesustainable economic growth and solve social issues, thereby gaining their satisfaction and deeper trust.

2. Fair and Appropriate
Trade

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, we will maintain a sound and proper
relationship with political bodies and government agencies.

3. Proper Disclosureand Management ofInformation

We will disclose accurate information about the Company timely and appropriately, and have constructive dialogues with thevarious 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.

4. Thorough Risk Management
and Severance of all
relations with Antisocial
Forces and Groups

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 and business activities Especially we will
resolutely confront any antisocial forces or groups and sever all relations with such groups.

5. Commitment toEnvironmental
Conservation

We will proactively initiate environmental conservation activities while taking into account the fact that commitment to solving
environmental issues is a prerequisite for a company to engage in business activities as a going concern.

6. Promotion of Social
Contribution Activities

As a good corporate citizen, we will actively participate in communities and contribute to their development.

7. Cooperation with theInternational Community

As a global corporation, we will comply with laws and regulat ions of the countries and regions where our business 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 ofstakeholders, and contribute toward the development of the local economy and society.

8. Respect for Human
Rights

We will carry out management that respects the human rights of all people.

9. Provision of a Safe andComfortable Working
Environment

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 comfortableworking environment that takes cleanliness, health, and safety into consideration.

10. Responsibilities of Our
Officers

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

11. Response to Problems

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

Chairman and President/Representative Director

Management Meetings andManagement Reviews

Check the progress status of businessplans, management policies andoperational plans

Central Labor Management
Council, etc.

Explain or discuss business plans,
important organizational changes,
management policies, etc

ReportDirectHead Office Divisions

DirectDirectReportRisk management, compliance, quality andenvironment management, etc.
Audit

Operating Divisions/Group Companies

23 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

The Environment

Board of Directors
Eight (8) directors, including
two (2) outside directors

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

Participation in Communities andCommunity Development

Shareholders’Meeting

Consult

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

Quality Assurance

Corporate Governance System

Oversight

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

Principles of Corporate Behavior

are well-versed in business operations be involved in making key
management decisions. From this point of view, the directors of theManagement Oversight Council

Management Policies

Practices

Board of Directors, periodically audits systems that ensure the appropriateness of NOK’s and its subsidiaries' operations in accordance with the Internal Control Regulations, and reports the results
to the Board of Directors and the Board of Corporate Auditors.

Policies in such a way that all its stakeholders are proud of us and chase their dream with us; and, while upholding the principle ofFair Operating

NOK has adopted the format of a company with a board ofcorporate auditors. In order to develop and provide products
and services from the customer's perspective in a business environment where technological innovation and the needs of end users
are rapidly changing, we believe it is important that directors whoboard, including external directors, mutually monitor each other andLabor Practices

For this reason, the NOK Group considers continuously strengthening the corporate governance system as one of our business management priorities, and we are committed to this goal.

society according to the Management Principles under the NOK spirit. We will pursue this through developing the Management

Human Rights

of economic society by creating added value through fair competi-

We, NOK Corporation, are committed to being an entity that fulfills the role of driving efforts toward the realization of a sustainableboard who concurrently serve as executive officers cooperate witheach other in the execution of their duties, while directors of the

Corporate Governance

Basic policy

NOK Charter of Corporate Behavior

24

GovernanceCorporate Governance

We have appointed external directors and external auditors witha wealth of experience and insight in industrial policy and diploma-

cy, as well as with a proven track record in corporate management

based on such expertise, and have them advise us on our businesstax accountant, a certified public accountant, and an attorney, whoprovide us with opinions based on their extensive experience andknowledge.

The secretariat of the Board of Directors provides support forexternal directors and external auditors. In addition, NOK has staff

the entire NOK Group, their remuneration is divided into the basic

Tokyo Stock Exchange.

neration for full-time corporate auditors for their contribution to theimprovement of performance from a perspective different from thatset forth in the Companies Act and the independence criteria of theRemuneration of Directors and Auditors
With respect to the remuneration of directors and auditors, thecompany establishes the following policy for determining the detailsof remuneration for directors and auditors. Based on this policy, theamount of remuneration for directors is decided by discussions at
the meetings of the Board of Directors and the amount for auditors
by discussions of auditors respectively, within the limits of the total
amount determined at the general meeting of shareholders.
Basic policy
The remuneration, etc., for directors and auditors are based on acompensation system designed to maintain the level of securing andretaining excellent human resources and increase their motivation to
improve the NOK Group's performance and corporate value.
Policy on Remuneration for Directors
Taking into account that directors are responsible for improving
business performance in each fiscal year and increasing corporate
value over the medium to long term, their remuneration is divided
into two categories: basic remuneration, which consists of a fixed
portion and a long-term performance expectation portion; and performance-linked remuneration. The long-term performance expectation portion is obtained by purchasing a certain amount of thecompany's stock through the shareholders' association made upof officers, which will be held for the duration of his or her tenure.
The level of payment is determined by comprehensively taking into
account such factors as the Company's performance, the level of▶ Please refer to page 69 for details.

Year

Month

PolicyPurpose

2004

Apr.

Established the Corporate Risk Management Office

Preventing and minimizing negative impacts on business continuity.

2006

May.

Enacted the NOK Charter of Corporate Behavior.

Enacted and declared Management Principles, Management Policies,
and Principles of Corporate Behavior.

Aug.

Enacted the Behavioral Guidelines Concerning Employee
Compliance.

Enacted and disseminated guidelines on matters to be complied withby employees.

2008

Jan.

Established the Internal Control Audit Committee

Development of an internal control system, audit of its operational
status and proper maintenance.

2009

Jun.

Introduced the Executive Officer System.

Separation of management oversight and executive functions, and theestablishment of an agile management system.

Changed the term of office of directors to one year.

Separation of management oversight and executive functions, and theestablishment of an agile management system.

Revised the executive compensation system.

Introduction of long-term performance-based and performance-linked
compensation system.

Established the Risk Management Committee.

Minimizing risk probability and losses through cross-organizationalverification and evaluation.

One external director took office.

Strengthening the management oversight function.

May.

Started assessing the effectiveness of the Board of Directors.

Improving the effectiveness of the Board of Directors.

Jun.

Increased the number of external directors to two.

Strengthening the management oversight function.

Established the CSR Committee.

Raising the awareness of CSR throughout the company and promoting
effective CSR activities.

Established the Central BCM Committee.

Increasing the effectiveness of the business continuity plan and contributing to the improvement of corporate value.

The Management Oversight Council (composed of the
President and Representative Director, external directors
and an auditor).

Check, assessment and advice on key management issues and serious
risks.

2015

2016

Jun.

Oct.

2019

Jul.

25 NOK CORPORATION CSR REPORT 2020

As auditors are responsible for auditing the execution of duties oftors are nominated in accordance with the external requirements

tinuously raise employees’awareness of the principle by distributing
an introductory compliance booklet and through education, etc. by
the department in charge.

remuneration according to their rank and performance-linked remu-

In addition, to ensure fair trade, the company establishes the“Fair
Trade Regulations” that stipulate prohibitions and managementof directors.

the Risk Management Committee is primarily responsible for taking

Advisory body on nomination and remuneration(Management Oversight Council)
In order to improve objectivity and transparency regarding nomination and remuneration, the Management Oversight Council wasestablished as an advisory body to the Board of Directors, which
regularly checks important matters such as nomination and remuneration and provides appropriate advice to the Board of Directors. The
Management Oversight Council is primarily composed of external
officers with members including the Chairman of the Board, the President and Representative Director, two external directors and one external auditor. The council checks and advises on key management
issues, such as nomination and remuneration.

Assessing the Effectiveness of the Board of Directors
In May of each year, NOK administers a self-evaluation questionnaire to all directors and auditors, including those from outside thecompany, asking them questions about the composition, operation,
and agendas of the Board of Directors, as well as questions about
the structure that supports the Board of Directors. The aggregate
results of responses are shared with the Board of Directors. In fiscal
2019, the analysis and assessment indicated that the Board of Directors as a whole was effective.

Internal Control
The NOK Group appropriately implements the "System for Ensuring the Propriety of Operations (Basic Policy for Internal Control
System)" established in accordance with the provisions of the Companies Act, and is committed to establishing its system under thebasic policy of continuing to strengthen corporate governance inaccordance with the Corporate Governance Code stipulated by the
Tokyo Stock Exchange.
Specifically, the company establishes the Internal Control Regulations based on the Basic Policy for Internal Control System. NOK’s
Head Office Divisions provide rules for the internal control system
and give directions to NOK’s operating divisions and subsidiaries,
while the Internal Control Audit Committee periodically audits theinternal control system to determine the progress of improvement
and implementation. During FY2019, there were no legal violations
or lawsuits that could have seriously affected the company’s performance.
Compliance with the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade, Act against Delay inPayment of Subcontract Proceeds, Etc. to Subcontractors andthe Unfair Competition Prevention Act

methods to ensure fair transactions.

In the event of a violation of the Group's anti-corruption policy,

action. Information on violations of the anti-corruption rules can beshared via the Whistle-Blowing Hotline.
The Internal Control Audit Committee conducts an annual audit

on the status of compliance with the Act on Prohibition of Private
Monopolization and Maintenance of Fair Trade, Act against Delayin Payment of Subcontract Proceeds, Etc. to Subcontractors andthe Unfair Competition Prevention Act and reports its results to theBoard of Directors. During FY2019, there were no violations in the
NOK Group.

Anti-Corruption Initiatives (Anti-Bribery)
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
maintain a sound and proper relationship with political bodies andgovernment agencies.”We also maintain a sound and proper relationship with political bodies and government agencies.”
Pursuant to the Principles, the Behavioral Guidelines Concerning
Employee Compliance prohibit collusive relationships and corrupting behaviors involving business partners and public officials, including excessive entertainment and bribery. The guidelines also forbid
embezzlement and misappropriation and other acts that may af-

fect company profits. These rules are communicated to employees
through providing education and distributing compliance handbooks
to help them maintain a high level of awareness.
In the event of a violation of the Group's anti-corruption policy,

the Risk Management Committee is primarily responsible for taking
action. Information on violations of the anti-corruption rules can also
be shared via the Whistle-Blowing Hotline.
The Internal Control Audit Committee conducts annual anticorruption audits and reports the results to the Board of Directors. During
FY2019, there were no violations in the NOK Group.

Communication with Shareholders and Investors
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 are invited to these sessions, where we explain the financial results and forecasts, and also
respond to questions.
Presentation materials used for financial results briefings are available at NOK's website.
In addition, from the standpoint of fair disclosure, NOK participates in events for individual investors every year.

Based on the Principle of Corporate Behavior, the NOK Group
stipulates in”
the ”
Behavioral Guidelines Concerning Employee Compliance”its stance and relationship with agencies, distributors, competitors and suppliers, and complies with the Act on Prohibition of

NOK CORPORATION CSR REPORT 2020

26

The Environment

Efforts to Enhance Corporate GovernanceIn addition to the above approach, candidates for external audi-

Policy on Remuneration for Auditors

Participation in Communities andCommunity Developmentin the Companies Act and the independence criteria of the Tokyo
Stock Exchange in nominating external directors, the company expects external directors to be able to advise on the company's corporate activities from an objective, wide-ranging and high-level perspective based on their wealth of experience and high level insight. In
this way, the company nominates external directors on the basis thatand the Unfair Competition Prevention Act, etc. The NOK Group con-expertise. The Company nominates them on the basis that there isno risk of conflict of interest with general shareholders.

Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors

Quality Assurance

ination policy.
The company believes that it is important that directors who execute business operations are well-versed in the NOK Group's operations and involved in making key management decisions.
In addition to complying with the external requirements set forth

general level of payment of listed companies for each position.

Practices

NOK decides candidates for directors and auditors at meetingsof the Board of Directors taking into account their abilities, insight,
character, etc., in a comprehensive manner. Specifically, the company nominates directors and auditors based on their qualifications
and aptitude for the position in accordance with the following nom-such as conducting objective and appropriate audits based on their

Fair Operating

Nomination of Directors and Auditors

Private Monopolization and Maintenance of Fair Trade, Act againstof concurrently serving in consolidated subsidiaries, as well as theLabor Practices

members who assist auditors in their audit work such as throughresearch on laws and regulations. The secretariat of the Board of
Directors sends and explains to the external directors and external
auditor materials on agendas for the Board of Directors meetingsprior to the Board of Directors meetings.

dividends to shareholders, the treatment of employees, the status

Corporate auditors are expected to perform functions and roles

Human Rights

activities from an objective, wide-ranging and high-level perspective.
In addition, we appointed external auditors, including a licensed

there is no conflict of interest with general shareholders.

Corporate Governance

External Directors and External Auditors

GovernanceCorporate Governance

The NOK Group established the “Compliance Rules” in 2006,

based on the“NOK Charter of Corporate Behavior,”which stipulates

Guidelines Concerning Employee Compliance”as a guideline for specific details of the regulations, which specifies the items that employ-

ees must comply with in their business activities and ensures that all
Group employees familiarize themselves with the guidelines.

1. Respect for Human Rights, Prohibition against Discriminationand Harassment
2. Fair and Appropriate Trade

Whistle-Blowing Hotline to defect and correct illegal conduct that

violates the Compliance Rules at an early stage.
An employee who becomes aware of illegal conduct can contact

the Reporting Hotline. If the illegal conduct is not rectified despite
having reported it as described above, or if it is difficult to report suchconduct to the Reporting Desk designated to receive such reports,
he or she can report the matter to the Whistle-Blowing Hotline.
The Whistle-Blowing Hotline consists of the Internal Control Audit
Committee and independent lawyers. Reports can be made anonymously, provided they are objective and specific. Moreover, thewhistle-blower is protected against disadvantageous treatment un-

the Group's management strategy where risks associated with theBased on these rules, the company establishes a management system in which the president is responsible for risk management andidentified and discussed to maximize returns in a timely and appro-

business risks that may affect the management of the company:

tee is established to assist the chief risk management officer, which
periodically identifies and analyzes risks, as well as quantifies themof loss”in which we seek to prevent or minimize the probability of(timing) of occurrence and the scale of loss (amount of damage);thus, examines issues and response measures by prioritizing their

Management and Supervisory Bodies

Board of Directors

Reporting DeskBusiness Execution Bodies
President (Risk Management Officer)

10. Appropriate Management of Information

Illegal Conduct

11. Prohibition against Acts that may Damage the Company’sInterests"Business Strategy Risk”Management② Investigation/
Correction

report“Risk of Loss”Management

Employees③ Response① Report

Group Strategy Review Meeting

Reported to

Risk Management Committee

An Illegal act in other departments

Department in charge of individual
laws and regulations
Department in charge of office
operations

Subsidiaries

reportHead Office Divisions(Business Administration Department)

Business Execution Bodies

The Environment

Department head

When the department in charge is
unknown, etc.

reportRefer for Discussion

An illegal act by a colleague

Thorough Awareness

Whistle-Bilowing Hotline
Illegal Conduct

compliance, such as through conducting a survey of all employeeson their compliance awareness. The company also provides compli- ③ Investigation/Correction
ance education at training for new employees and newly appointed managers, as well as distributes compliance handbooks to all④ Response
employees and publishes a series of articles titled“An introduction

reportEmployees④ Response
Choose① Reporting① Reporting

Internal Hotline〈NOK〉

External Hotline〈Lawyer〉

Internal Control Audit Committee
Audit Committee (Legal Affairs Dept.)

27 NOK CORPORATION CSR REPORT 2020

Check and Evaluation

Participation in Communities andCommunity Development

Direct

12. Giving Report of Violations of Ordinances etc.

to compliance”in the company’s newsletter; thereby, continuously
promoting awareness.

Guidance and Supervise

Quality Assurance

report9. Provision of Useful and Safe Products

In its“Compliance Rules”the NOK Group designates divisions incharge of individual laws and regulations to promote compliance activities in their respective operations, which act as a point of contact
for reports and consultations on related laws, internal regulations
and rules.
The NOK Group has designated October of every year as a compliance promotion month in order to regularly inform employees of
NOK's compliance initiatives and to help raise their awareness ofPractices

der the Compliance Rules. Whenever a report or consultation is received, the Company takes appropriate action, such as investigating
and correcting the situation in question.

7. Environmental Conservation

Compliance Promotion System and Initiatives

importance and urgency.

occurrence and losses in order to maintain corporate value.
“Business strategy risk” is assessed at meetings for examining

6. Severance of all relations with Antisocial Forces*Refer to the CSR information (Governance - Risk Management/Compliance) on the
NOK website for details of each provision.

through risk-level assessments that take into account the frequency“Business strategy risk”in which we seek to maximize returns while
maintaining balance with risks of increasing corporate value; and "risk

5. Laws Related to Intellectual Property Rights

Enacted on August 1, 2006, revised on January 1, 2020

priate manner. As for“risk of loss,”the Risk Management Commit-

promotes risk management for the Group. There are two types of

4. Export/Import Procedures (Security Trade Control)

8. Safety and Healthpromotion of business and new projects at Group companies are

Fair Operating

3. Regulations against Insider Trading

The NOK Group establishes the NOK Group Reporting Desk andNOK's“Risk Management Rules”stipulate the basic policy andmanagement system for risk management for the entire Group.

Labor Practices

Behavioral Guidelines Concerning
Employee Compliance（Plan）

Reporting and Whistle-Blowing System

Human Rights

compliance with laws and regulations as well as the company's various rules and regulations. The company established the“Behavioral

Risk Management

Corporate GovernanceCompliance② Cooperation

NOK CORPORATION CSR REPORT 202028

GovernanceSociety

Corporate GovernanceSocial Report
NOK will proceed with business continuity measures based on the

1. Business Continuity Management (BCM) System

Of business risks and emergencies, NOK defines natural disaster,fire and explosion, serious accident and epidemic of infectious dis-ease as "events that interfere with business continuity.”The company
established the“Business Continuity Management System”to ensureSpecifically, the NOK Group BCM Committee was established asa standing committee to promote business continuity management
activities. The management system composed of the BCM Committee is used to formulate, maintain, and update the business conti-

2. As a member of the local community, actively cooperate withthe recovery of the whole region.
3. Minimize the impact on customers and stakeholders and fulfill
responsibilities as a business operator.
Each business site, including domestic and overseas group com-

responsibility.”
These are words, around 1970, of the president at that time. They tell us that NOK has focused on“corporate social responsibility”in its business activities since the early days of the concept.
Looking back at the history of the company, I can say that coexistence with local communities has largely
contributed to its development. In the early 1970s, many migrant workers from distant parts of Japan were
working at the factories in Haneda and Fujisawa. The workers were bearing heavy burdens due to theregional imbalance between employment opportunities and available labor. In order to resolve this issue,
the idea of establishing factories in the home areas of the migrant workers was proposed. The first factory
was established in Kami-gun, Miyagi Prefecture in 1973. Since then, factories have been built in areas fromthe Tohoku region to the Kyushu region, and now 7,000 people are working at about 20 group companies
across the country, contributing to the development of both local communities and the company. We will
strive to continue to be a company that is loved and honored by local communities.

Practicespanies, has a plan that outlines policies, systems, and procedures toensure that important business operations are not interrupted or restored as quickly as possible in the event of an unforeseen event. At
the same time, the company is verifying the effectiveness of the plan
through training, etc., and responding to identified issues, as well as
is continuing to implement measures to minimize damage, improve
emergency communication methods and reporting systems, and reinforce the earthquake resistance of our IT infrastructure.

pany, the second is enrichment of the lives of all employees, and the third is fulfilling their corporate social

Senior Operating Officer, General Manager, Corporate Administration Office andCorporate Risk Management Office

Fair Operating

conduct inspections, and engage in continuous activities.
In the event of an emergency, the company shall immediately
set up an emergency response headquarters at the head office andon-site response headquarters at local business establishments. Depending on a given situation, relevant departments and divisions will
work together to deal with the situation promptly and appropriately.

1. Give first priority to ensuring safety, protecting people andsaving people's lives.

Labor Practices

nuity plan (BCP), secure budgets and resources to implement them,
implement preventative measures, conduct education and training,“A company is property that is shared by three parties: shareholders, employees and society.”“Managers have three types of responsibilities. The first is to ensure the stability and development of their com-

Human Rights

business continuity and to promote business continuity activities
continuously and effectively in the event of such an event.

following basic policy:

Message

Corporate Governance

2. Planning and promoting business continuity plan (BCP)

Response to Disaster Risks

Noriyuki Takahashi
Quality Assurance

NOK Group Business Continuity Management System
Central BCM Committee

Society

Seal BusinessElectronic Products BusinessRoll Business

Other Business

Human Rights
Respect for Human Rights

Subcommittee in Segment

Respect for Human Rights (Basic Concept of Human Rights)
Subcommittee by function (cross-functional)

Item 1 of NOK's Management Principles stipulates as follows:“Management has to run the Company based on feelings of loveand trust in its employees.”We value the life of each employee andrespect their humanity, and at the same time, we maximize the potential of each employee. We thereby maintain and reinforce thecompany's competitive edge. That is to say, we firmly uphold the*Subcommittee is established in each segment’s BCM Committee.

Information Security

Protection of Intellectual Property

To appropriately manage information provided by customers andinternal assets such as the company’s unique technology, the NOKThe NOK Group has put together important points regarding intellectual property-related laws in the“Behavioral Guidelines Concern-

In FY2019, based on the results of risk assessment, the company
focused on measures against the risk of information leakage due tointernal fraud. In addition, the company has established a systemthat allows us to conduct emergency inspections and ensure thatthe entire group can take action against increasingly sophisticatedcyber attacks.
We will continue to implement a P-DC- A cycle to maintain andimprove our information security measures.

29 NOK CORPORATION CSR REPORT 2020

ing Employee Compliance”ensuring that all employees are awareof these points. In this way, the group promotes the application andacquisition of intellectual property rights for the company’s own inventions, as well as respects the intellectual property rights of others
and strives to prevent infringements of others’rights by researching
and identifying patents, etc., of other companies.
To protect NOK's brands, we combat counterfeiting, even outside
Japan, through our Anti-Counterfeit Committee. During FY 2019, thecompany uncovered 4 cases of counterfeit factories in China andremoved web pages selling counterfeit products from online sales
sites in 830 cases.

stance of respecting human dignity across all aspects of our operations.
A precondition for such management based on respect for thehuman dignity of employees is the idea of respect for basic humanrights. Based on the idea, the NOK Charter of Corporate Behavior
makes a declaration as follows:“We will carry out management that
respects the human rights of all people.”We develop our business inaccordance with this declaration.

Respect for Basic Human Rights Related to Employees
NOK's Principles of Corporate Behavior set forth “Respect for
Human Rights”and“Provision of a Safe and Comfortable Working
Environment,”and our Behavioral Guidelines Concerning Employee
Compliance stipulate as follows:

1. Respect diversity, personality differences and individuality, and do
not practice discrimination based on race, color, creed, religion,
nationality, age, gender, sexual orientation, gender identity, national origin and physical and mental disabilities.
Do not tolerate such discrimination.
2. Do not conduct any acts of harassment that have negative effects
on the working environment, such as impairing the dignity of anindividual and causing a disadvantage to or posing a threat to anindividual.
Do not tolerate such acts of harassment.

Major Initiatives Related to Human Rights(Implementation of Activities and Various Education Programs for
Promotion of Human Rights)
In line with the enactment of legislation to prevent power harassment, the number of cases of which is said to be increasing rapidly
especially recently, we revised our Behavioral Guidelines Concerning

Employee Compliance and Rules of Employment. In terms of general harassment, we also enhanced training and other education
programs for managers and reviewed responses given through em-

ployee hotlines, thereby establishing a system for preventing andpromptly and appropriately responding to harassment occurring internally and against external business partners.

NOK CORPORATION CSR REPORT 2020

30

The Environment

Subcommittee by organization (by business division and establishment)Group establishes the“NOK Group Information Security Basic Policy.”The company also establishes a company-wide“Information
Security Committee”to systematically promote activities.

Participation in Communities andCommunity Development

Segment BCM Committee

Society

Labor Practices

Basic Concept
To practice the management principle of respecting human digMoreover,“compa-

ny with free-flowing communication,”which is one of NOK's Management Principles, leads to active promotion of dialogue among
employees and dialogue between the company and employees.

Under these Management Principles, NOK is making efforts tocreate a workplace where employees can work vigorously without

Compliance with Labor-related Laws

“the Company based on feelings of love and trust in its employees”

trust in its employees”and promote its healthy development. Re-

as stipulated in the Management Principles in their respective workplaces. Under the basic principle of human resources development

labor-management relationship.

workplaces where employees can find satisfaction in their jobs andfeel that they are growing. To this end, we are making efforts to de-for the company to“run the Company based on feelings of love andspecting the right to organize, the right to bargain collectively andother rights of workers, the NOK Group has established a healthy

At the regular labor-management meetings held with the participation of the top management, not only negotiation about working
conditions is conducted, but also explanations on business condi-

tions and management issues are given, and discussions on the company’s important policies and measures are held so that the laborside and the management side can cooperate in realizing both business development and employee happiness.

and the vision of human resources development, NOK aims to create

velop human resources through various relevant programs.

Basic Principle of Human Resources Development“A workplace nurtures its people, and people
nurture their workplace.”
Vision of Human Resources Developmentin their jobs and respect each other”
NOK’s Human Resources Development Programand on-the-job training aiming at broadening capability of each in-dividual to cope with various duties, we are developing human re-sources who can actively exercise their abilities in global society.
The program, which is implemented for a term of more than half ayear, is intended to supplement the internationalized human resources development system, in which employees study language abroad

under the in-house system.
“Special-purpose training”is targeted at employees who needs

focused education or development from time to time. In FY2019, theprogram was implemented under themes of active participation ofreemployed employees and vitalization of workplaces.
As seen from the above, NOK endeavors to develop and vitalize
employees by increasing opportunities for them to receive various
training. Such training is implemented to provide employees withnot only opportunities for simple capacity building, but also opportunities to establish solid relationships with their seniors and peers,which will be very helpful for ensuring smooth communication ateach workplace.
Training records of programs are managed and monitored in thein-house training management system. In FY2019, 1,103 employees
received training through the above programs. The total training timewas 13,992 hours (FY2019).

Participation in Communities andCommunity Development

selves and their colleagues can find satisfaction in their jobs and feelthat they are growing.
For example,“4th year follow-up training,”which is a junior training program collectively targeted at employees in their fourth year after joining the company as new graduates, provides not only knowledge and information, but mainly assigns group work to the trainees
so that it will lead to the vitalization of the organization. In the group
work, trainees share the contents of their daily work and their hard

have, such as how they should perform their jobs, how to interact
with people in and outside of the company, and the necessity of improving their linguistic ability and other skills. It is a big help for junioremployees to know that their seniors have faced and overcome thesame hurdles facing them. This training provides trainees with opportunities to share a sense of unity and be in friendly rivalry with theirpeers, as well as to reconsider their roles and ways of performing
their jobs at their respective workplaces.
Incidentally, since FY2019, domestic group companies were included in the management program (worksite leader training, newmanager training, and manager follow-up training).
On the other hand, the development/specialized education is forenabling participants to acquire the necessary skills to perform theirduties.
While specialized education used to be provided independently
by each department to employees within the department,“businessskills training,”which is a special skills training program, allows all
employees who wish to participate in it to do so in a cross-departmental manner. Information sharing through visualization of all information on courses provided by departments enables employees toapply for their preferred courses.
Moreover,“global human resources development”aims to devel-

The Environment

experiences, as well as invite seniors from various job types to holdpanel discussions. By sharing experiences of and exchanging opinions with seniors who are working vigorously, trainees can receive avariety of advice on concerns that many junior employees currently

4th year follow-up training
Number of participants
FY

FY2017FY2018FY2019

863

736

1,103

Number ofparticipants* Including group companies from FY2019

Training time results
FY

FY2017FY2018FY2019Training time

13,351 hours

12,866 hours

13,992 hours* Including group companies

op human resources who can actively apply English at work rather

31 NOK CORPORATION CSR REPORT 2020

Quality Assurance

NOK's human resources development program consists of level-specific education and development/specialized education.
The level-specific education is for enabling attendees to understand their roles and the expectations from society correctly, andto contribute to the creation of workplaces where attendees them-mental and communication training necessary for working overseas,

Practices“Development of human resources who take pride

training in which employees receive language training, as well as

Fair Operating

Domestic group companies are instructed to ensure compliancewith the Labor Standards Act, the Labor Union Act and any and allother labor-related laws. Overseas group companies are also instructed to ensure compliance with local labor-related laws that areequivalent to Japan’s labor-related laws. Moreover, NOK periodically confirms that the group companies are abiding by basic rules
concerning the prohibition of child labor and forced labor.

To ensure that employees can feel that the management is running

than those who can simply speak English well. Through off-the-job

Labor Practices

anxiety.

Dialogue between the management and employees is essential

Basic Concept

Human Rights

nity is to respect and protect workers’rights.

Establishment of a Healthy Labor-Management Relationshipbased on Dialogue

Development of Human Resources

Corporate Governance

Respect for Fundamental Rights and Dialogue

NOK CORPORATION CSR REPORT 202032

Society

Labor Practices

Diversity
Executive officer training

Operating Officer

Basic Concept

4th year follow-up training
Interview

ees of different nationalities, races, genders, and employment types

are currently working in the NOK Group. We ensure that executivesof both domestic and overseas bases understand management

based on respect for human dignity, which is the basic principle of
the NOK Group, and practice such management in accordance withthe circumstances in each region.

Management program

Special skills training
program

Human resources

development program

Development/specialized education

With the stance of localizing business execution by overseas bases, the NOK Group furthers development and appointment of human resources who acknowledge and understand local conditions
regardless of their race or gender.
Interaction among executives, technology, manufacturing, sales,

general affairs and other departments of both domestic and overseas bases is facilitated so that they can utilize the outcomes fordevelopment of human resources and improvement of operational

ufacturing employees of overseas subsidiaries by technology andmanufacturing departments and hire non-Japanese students in Japan.

Advancement of female employees

and abilities.
The medium-term plan for these initiatives is to increase the percentage of new female recruits for management track positions
to 10% by the end of FY2022. The plan has also set the target of

FY2016FY2017FY2018FY2019

1.96%

1.98%

2.06%

2.06%

2.06%

Senior Employee System (Reemployment after Retirement)
In 2006, NOK introduced a system to rehire employees who havereached mandatory retirement age. We seek to improve the system so that retired people who still wish to work can make full useof their rich work experience and advanced skills gained throughtheir career at NOK. For example, retired employees can pass theirwork-related knowledge and techniques on to younger generations
while maintaining their livelihood through reemployment under thesystem.
In FY2016, flexible working patterns were permitted, and working
conditions were revised. While revising working conditions from time
to time thereafter, we established a job posting system and a human resources registration system for senior employees. Moreover,through providing seminars on life planning to support livelihood after retirement and training prior to retirement for maintaining the will
to work, we continue to facilitate senior employees taking on more
active roles and to enhance their job satisfaction after retirement.

Number of persons
reemployed(As of March 31, 2020)

FY2015FY2016FY2017FY2018FY2019

Male

166

202

210

223

209

Female

4

6

5

6

6

* On a parent basis

tripling the number of female employees in management positions
compared to the number at the end of FY2019.

Rate of hiring of
new female graduates
for the managerial track

Hiring ratio(As of March 31, 2020)

FY2015FY2016FY2017FY2018FY2019

2.9%

3.1%

4.4%

6.1%

5.2%

* On a parent basis

33 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

34

The Environment

NOK takes various measures to increase the number of females
recruited for management-track positions. It also provides training
and guidance to enable existing female employees in non-management-track positions to be actively promoted to management-track
positions and on to executive positions according to their willingness

employment

FY2015

Participation in Communities andCommunity Development

quality and efficiency in each department.
Moreover, active appointment, development, and participation of
employees of foreign nationalities are advanced through appointment of local officers of overseas subsidiaries to officers of domestic
companies, and implementation of training for technical and man-

(As of March 31, 2020)

Employment of disabled persons

Quality Assurance

Level-specific education

Top management program

comfortably in order to establish an environment where people withdisabilities can work vigorously.

Practices

Junior training program

promote the allocation of people with disabilities to jobs that satisfy them and the creation of workplaces that enable them to work

Fair Operating

New employee training

live independent lives in their communities. Divisions around Japan

Rate ofGlobal Furtherance of Diversity
New employee

NOK furthers the employment of people with disabilities so thatthey can take jobs according to their abilities and competencies andLabor Practices

4th year
3rd yearWorksite leader training

or nationality.
On a global consolidated basis, more than 40,000 diverse employ-

Enhancement of Employment and Supporting System for
People with Disabilities

Human Rights

Sub-section
Chief, AssistantSection Manager

Business skills training

New manager training

The NOK Group upholds the stance of recruiting and appointing

various and diverse human resources regardless of their gender, race
Special training

Manager follow-up training

Section Manager

Temporary assignment training

Department manager training

Global human resources development

Department
Manager

Corporate Governance

System of NOK’s human resources development programSociety

Labor Practices

Basic Concept and Initiatives for Work Style Reform
As part of management based on respect for human dignity, NOK

can balance their job satisfaction and comfortable lives. In addition
to past measures to help employees to achieve both professional
and personal goals, we now consider and undertake various othermeasures from the viewpoint of work style reform.

To realize flexible work styles and diverse work styles, we also

rate of paid leave taken by employees.

* Some systems provide support that is more wide-ranging than the support
stipulated in childcare and nursing care-related laws.

NOK’s systemApplication period for

Until the end of the

reduced working hours forthird grade ofchildcareelementary school

Nursing care leave

1 yearLegal requirements

Until 4 years old

93 daysmance of previous initiatives in the labor-management committee
annually. Specifically, we check the record of overtime work hours

a message on safety from top management to employees as well as
improve and ensure safety awareness and eliminate industrial acci-

as specified divisions to be managed and receive support from thestyles. We develop a plan for new initiatives and review the perfor-

and the data on paid leave actually taken, on both department andindividual bases, and thereby identify problems and develop a planof countermeasures. At the Labor-Management Council, we review
the problems and the plan to establish medium- to long-term targets.
The current targets are as follows:
1. In principle, the total of overtime work and work on a holiday to
be within 45 hours in a month and 360 hours in a year
2. Paid leave is to be taken for 15 days or more in a year

To this end, as measures for improving operational efficiency, weare striving to streamline operations boldly, nurture multi-skilledworkers, promote the digitalization of operations, and especially facilitate the smartification of back-office departments.

safety as a top priority in all operations. To explicitly communicate

dents, we formulated the NOK Group Safety Principles in FY2017
and are promoting our safety activities accordingly with unified efforts.

NOK Group Safety Principles“Safety is the foundation for
implementing management spirit that
respects human dignity, my desire andmy mission”

Safety & Health Dept. in implementing the plans.

Initiatives
1. Development of the medium-term occupational safety andhealth plan
The NOK Group established and has been implementing continuously the medium-term occupational safety and health plan (for
FY2019 to FY2022), focusing on the following three items:(1) Improving the level of safety management to eliminate losttime injuries and reduce the total number of occupational
accidents to half *(2) Equipment safety measures through risk assessment(3) Zero explosions and fires and thorough implementation of
measures to prevent recurrence

Self-evaluation and Reporting System
NOK annually provides employees with an opportunity to reporton 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 as
an opportunity to communicate with one’s supervisor.
The results of the self-reporting are used to develop and utilize
human resources effectively in order to ensure that the right personnel are appointed to the right positions, thereby improving theworkplace environment.

Other Welfare Systems

1. Workplace communication

NOK aspires to create an open workplace. Executives and managers take the lead in creating and maintaining a workplace where
good communication is ensured between superiors and subordinates, among coworkers and between departments.
For example, for social gathering meetings composed of officers* Number of cases in FY2022 compared to the number in FY2018

2. Safety and health activities(1) Safety activities in which the top management and employees
all participate
The heads of the head office and divisions make a safety declaration, as well as set and implement a“Safety Day”every
month, in which all employees participate for the purpose of

Signs in a factory

Occupational Health and Safety Promotion System and Initiatives(Creation of Safe and Comfortable Workplaces)
The NOK Group has established a safety and health management
system headed by the president of NOK to promote safety andhealth activities.
The Central Safety and Health Committee, which serves as an activity organization, holds meetings twice each year to develop annual
policies. These policies are then promulgated to divisions and groupand employees, the company supports divisions and respective
workplaces in planning and holding social gatherings.

companies so that the policies will be incorporated in an annual
safety and health plan and implemented by each division or groupcompany. The Safety & Health Dept., which supervises safety andhealth affairs at a corporate level, actively supports the creation of

2. Support for retiree associations

Organization to Promote Safety and Health Activities

To help employees enhance their life after retirement, NOK established retiree associations around Japan (regional eight blocks). Eachassociation regionally holds gatherings and other events for retirees
to interact with each other.

Central Safety and Health Committee
Safety and HealthControl Division

Divisions

35 NOK CORPORATION CSR REPORT 2020

Moreover, divisions developing improvement plans are designatedDomestic plants

Head office/branches

Safety and HealthCommittee

Safety and HealthCommittee

Group Companies
Safety and HealthCommittee

early identification of and response to risks in their department
through awareness raising and mutual enlightenment of safety
among employees.

(2) Measures for securing safety of facilities
Based on risk assessment for facilities and operations, we continue to take additional measures to reduce operational risks,such as introducing safety mechanisms into facilities and plac-

ing safety covers on equipment, thereby mitigating operationalloads on employees and creating a work environment where
employees can work more safely.

(3) Zero explosion/fire
For fire management, we focus on prevention of fire disasters/
small fires and therefore established and utilize a system whichenables us to share company-wide information on near miss incidents and take preventive measures against their recurrence
in a unified manner.

3. Safety and health education
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 safety knowledge. The
Mottos are used as a teaching aid for all employees to shareawareness of safety in operations.
NOK CORPORATION CSR REPORT 2020

36

The Environment

Iteming hours to help employees to pursue comfortable and affluent life-

cycle on a quarterly basis and conduct analysis to reinforce the weak
points of each workplace by utilizing radar charts on a yearly basis.

Participation in Communities andCommunity Development

flextime system (without core time), easing the restriction on taking
paid leave for half a day, and allowing expiring days of paid leave tobe reserved for up to 30 days. At the same time, we are considering
teleworking and other work style arrangements, taking into accountimproving work efficiency and realizing the optimum work-life balance for employees.

We improve our safety and health plan by implementing a PDCA

respecting human dignity. Safety represents both a mission for management and a desire of all employees. We have well recognizedNOK has endeavored to shorten the total number of actual work-

Quality Assurance

in ways that suit their lifestyles. To ensure the systems are properly
functioning and facilitate their use by employees, we provide information and advice on them.
Moreover, we are creating a comfortable workplace by adopting asafety secretariats at plants, the head office and group companies.

Practices

NOK provides childcare leave, nursing care leave and other employee benefit systems, some of which offer support that is morewide-ranging than the statutory support*, to help employees work

principles, and we believe that safety is a crucial precondition forbe maintained and improved in each division, in collaboration with

Fair Operating

Work-life Balance(Support for Balancing of Work and Family)

Respect for human dignity is one of the NOK Group's management

Labor Practices

work on the implementation and improvement of a flextime system,
teleworking, and childcare leave, nursing care leave and other employee benefit systems, the lowering of the upper limit of overtime
work hours for shortening of working hours, and improvement of thesystems by which the level of safety and health management can

Basic Concept

Human Rights

is making efforts to realize a working environment where employees

Enhanced Initiatives for Shortening Working Hours andImproving the Rate of Paid Leave Taken by Employees

Employees’Safety and HealthCorporate Governance

Human Resources and Welfare Systems

Society

Labor Practices

year to ensure a common awareness of safety and health issues.

We formulated the Safety and Health Standards to set standards
for employee education and training as well as for facility safety.

With the aim of raising the level of safety awareness and mutu-

share information. We also actively received, as a workplace
for practical training, university students studying to become

human dignity, we have, over a period of time, exercised necessary

Risk prediction training at an overseas NOK group company

control and provided education and guidance in promoting safe driving, in the hope that we can reduce, even if only slightly, the number

developed a system that incorporates individual interviews byrule violations leading to accidents.

clinical psychologists and is thereby able to offer counseling, inaddition to efforts realizing self-care, line care and care provided by in-house occupational health staff.

staffed by an external professional institution to deal with mental health problems at an early stage and continue to provide
support for smooth return to work.
To support health, we have promoted, in cooperation with

Education for management position

stretching exercises and muscle training.

health promotion activities
Number of health consultation
calls
Rate of receiving comprehensive
health examination

Virtual crisis simulation training

Rate of receiving secondary
examination

1970s, even before the Road Traffic Act made the fastening of seatbelts mandatory.
NOK divisions actively perform traffic safety lookout duties andparticipate in traffic safety seminars and local traffic safety promotion
events organized by JAPAN AUTOMOBILE FEDERATION (JAF) andlocal police departments.

Number of traffic accidents where NOK was responsible andNOK and the other party were both responsible (NOK Group)(Cases)
130

113

106

110
FY2017FY2018FY2019

1,040

867

850

99.8％

99.9％

99.9％

84.0％

89.4％

89.9％

93

90
70
0

FY2017FY2018

Participation in Communities andCommunity Development

Hair may be caught up in therotating part of equipment.

ness of traffic safety. In addition, we have been working to ensurethat all employees and fellow passengers wear seat belts since theQuality Assurance

Major mental and physicalaccidents and violations to maintain and improve employees' aware-

FY2019Number of Industrial Accidents (NOK Group)
FY2017FY2018FY2019Safety, hygiene andhealth training for line
managers

113

143

129

Facility safety training(simulation/safety
standard training)

51

No. of units undergoing facility safety
improvements(Cases)

74

70

80

70

The Environment

Major safety-related
initiatives

60
40

330

59

0

16

7

20

FY2017

Injuries not accompanied by lost time

1,091

622

8

FY2018

Traffic safety guard activity

FY2019

L ost time injuries

1,131Stretching and muscle training program by athlete employees
FY2017

Investment in facilities
and equipment for
390 million yen 370 million yen 320 million yen
safety measures[Lost Time Injury Frequency Rate*]
FY2017

Activities to improve the workplace environment[Lost Time Injury Severity Rate*]* Rate of occurrence of lost time injuries per 1 million hours

FY2018Average among
manufacturers

1.02

1.20

NOK Group (domestic)

0.25

0.46

37 NOK CORPORATION CSR REPORT 2020

* Severity of injuries represented by the number of workdays lost per 1,000 hours

FY2019Practicesseminars to prevent back pain and stiff shoulders (at divisions)and walk events (at the head office and divisions). Our athlete employees, Okubo and Hirayama, held a training session
as instructors and taught 89 participants how to perform easy

For example, we issue SD (safe driver) cards to good drivers andcommend them according to the number of years without causing

Fair Operating

industrial physicians, activities to encourage employees to engage in exercise in an enjoyable format, such as the provisionof guidance concerning lifestyle diseases (at the head office),of people adversely affected by traffic accidents and eradicate traffic

Labor Practices

We have also established a free 24/7/365 telephone hotline(Excerpts)

ating a culture of traffic safety. From the viewpoint of respecting

future industrial hygiene staff.

To meet the mental health needs of employees, we have

was conducted in addition to the training workshops held in Japan.
To secure the safety of contractors conducting work on NOK
premises, we implement the sharing of near miss incident information and risk prediction training before they start their work so thatsafety working procedures will be adhered to.

Use of gloves may be
dangerous in some work, forexample, work conducted neara rotating object.

traffic society through their products, the NOK Group focuses on cre-

Human Rights

ment produced by NOK is also used for safety and health education.

Safety and Health Mottos

Meetings ofoccupational health nurses and public health nurses are held to

departments. As practical education, virtual crisis simulation equip-

mestic group companies and plants. In FY2019, an inspection trip tooverseas NOK group companies implementing good safety measures

Activities for traffic safety
As part of the responsibilities of companies associated with theof employees to use the results for improvement.

These standards are applied to the on-site operations of relevant

al enlightenment among safety secretariats, training workshops areheld twice a year with the participation of the secretariats at do-

Mental and Physical HealthIn FY2019, NOK started activities to analyze the health data

Corporate GovernanceLine managers receive safety, hygiene and health training at thetime of their appointment and again at the beginning of their third

FY2017FY2018FY2019

1.20

Average among
manufacturers

0.08

0.10

0.10

0.27

NOK Group (domestic)

0.01

0.07

0.04

We first launched activities to improve workplace environments
in FY1993. We have managed our working environments (noise,heat and cold), operations (work posture and the handling of heavy
objects) and support systems (the provision of facilities for relaxation). The NOK Mid-Term Safety and Health Plan from FY2019 has
strengthened efforts to improve our working environments with an

FY2018FY2019Total number of employees
commended for safe driving

856

856

910

(Those commended for 30

（95）

（78）

（124）

years or longer)emphasis on group companies.

NOK CORPORATION CSR REPORT 202038

Society

Fair Operating Practices
Compliance with Fair Operating Practices
We at the NOK Group believe that in order to fulfill our corpo-

across the procurement supply chain while building up trustful rela-tions therein, thereby achieving interactive evolution.
In addition, today's society has many issues such as environmental

issues and human rights issues, and companies are expected to solve
the issues for building a sustainable society.

At the same time, we ask them to respect our "Corporate Behav-

ior Charter," "CSR Procurement Guidelines," and "NOK Group Green
Procurement Guidelines," to ensure fair and impartial procurement
activities that consider possible impacts on society and the environment, thereby realizing a Sustainable Society. We will make ouroverall efforts throughout the supply chain toward the realization of

In order to fulfill our corporate social responsibility, we request our suppliers to refer to these guidelines and actively promote
CSR activities, including within their supply chain, while complying with the guidelines within NOK Group.

1

this initiative.

We shall comply with laws and social norms in each country, including competition laws, trade-related laws, andenvironment-related laws.

Respect for human rights

2

Safety2

Based on the idea of free competition, we select suppliers in a stringent manner by providing fairand equal opportunities.

4

Green procurement

3

We share mutual interests and benefits with suppliers based on the idea of mutual prosperity.

5

Confidentiality

4

We engage in open communication and build a relationship of trust with suppliers.

Elimination of anti-social forces

5

6

We conduct improvement activities proactively in collaboration with suppliers.

7

Activities regarding conflict minerals

8

Contribution to local communities

39 NOK CORPORATION CSR REPORT 2020

We shall carry out procurement activities based on the NOK Group Green Procurement Guideline with consideration
for preserving the global environment .

We shall deal with suppliers that can appropriately manage and control the confidentiality of information on
customers, individuals and technologies, etc. obtained through business transactions.

We shall 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 with them.

The Environment

10

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

Participation in Communities andCommunity Development

9

Quality Assurance

3

Practices1

We comply with laws, regulations and social norms.

We shall 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 shall contribute to the development of local communities by promoting business transactions with local suppliers.

Information disclosure

We shall disclose business information related to management and finance, product handling and safety, quality,
environment information, etc. to all stakeholders in a timely and appropriate manner, and through open and faircommunication, we shall maintain and develop mutual understanding and trust.

Deployment of suppliers’CSR

In order to advance initiatives throughout the supply chain, we request suppliers to implement initiatives equivalent tothose described in the NOK Charter of Corporate Behavior and CSR Procurement Guidelines.

NOK CORPORATION CSR REPORT 2020

Fair Operating

NOK Group Procurement Policy

・We shall 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 and that would not satisfy industrial safety andhealth regulations.
・We shall not discriminate on the grounds of race, ethnicity, creed, gender, age, marriage, physical characteristics,
disability, etc. in any employment or treatment (application, recruitment, promotion, remuneration, right to receive
education, work grants, wages, welfare, punishment, dismissal, retirement, etc.).
・We shall comply with the laws and regulations of each country and region where employees are entitled to minimum
wages, overtime, wage deductions, piece-work payment, other benefits, working hours (including overtime), holidays,
and annual paid holidays.
・We shall communicate and discuss with employees directly or with their representatives faithfully. We also recognize
the right of employees to freely associate or not to associate in accordance with the laws and regulations of eachcountry or region.

Labor Practices

To realize this initiative, the NOK Group has established the "NOKGroup Procurement Policy" and is conducting procurement activities

Supply Chain Management

Compliance with laws and regulations

Human Rights

rate social responsibility it is essential to share common awarenesswith our suppliers.

Corporate Governance

Basic Concept

CSR Procurement Guidelines

40

Society

Society

Fair Operating Practices

In consideration of the importance of co-prosperity with suppliers,

the supply chain lest illegal profits be offered to antisocial armed

ship of trust and a long-term cooperative relationship with suppliers.

In addition, we, as a member of the Conflict Minerals Regulation
Response Working Group in the Procurement and Production Sub-

we at the NOK Group are making efforts to build a strong relation-

For the purpose of fair trading, in September 2016, the Minister of"enhanced added value" for both the original contractor and subcon-

tractors, thereby improving the trading environment throughout theinsurgents who violate human rights.

committee of the Japan Auto Parts Industries Association, collectinformation through the Working Group’s activities and implement

conflict minerals initiatives in the supply chain.

deal therewith. We also make these matters universally known topractice fair trading.

In recent years, we have had a high incidence of natural disasters
and fires that affect steady production and procurement. We areworking to build a system in which we can gain an understanding of
the big picture of the damage situation upon occurrence of the disaster and adequately take necessary measures in cooperation with
our suppliers.
In fiscal 2019, we sent a "BCM check sheet" to our suppliers andclarified problems through self-checking. In fiscal 2020, we will strive
to build a resilient supply chain while providing guidance on effective
measures.

Behavioral guidelines

1. All employees work together to make constant efforts
to improve quality
2. Improve our unique technology
3. Continuously improve quality control technology
4. Thorough compliance with laws and regulations
5. Continuous policy management

Under the chairman-advocated policy "Return to the basics ofquality," we will be returning to the basics, with the following
four points in place for the three years of fresh start toward
ensuring customer-trusted NOK quality.

1. Thorough adherence to basics
In order to earn more customers’trust, the top priority of ours is
to stick to the basics. More specifically, we will aim at educating
our employees in quality assurance against correct standards
and having them comply with the same, thereby continuously
improving their skill in quality assurance.
We will ensure that our products we deliver to our customers
do not cause any inconvenience due to inadequate work
instructions or non-compliance with the same.

2. Prevention of serious quality problems
As demands for product safety and quality increase, public
attitudes toward, for example, compliance and responses to
product defects identified in the market, are becoming more
stringent.
In addition, the increasingly sophisticated demands of customers
require a challenging way of process development, and hence,
we will enhance our "workmanship" in manufacturing process
ranging from development to production sites to prevent suchproblem from occurring.

3．
Reduction of waste loss

4. Improving quality control level by utilizing IT
By promoting the digitization of operations, we will streamline
operations and strive not to rely too much on knacks, tips, andexperience.
In addition, we will improve the speed and accuracy of
traceability by further enhancing the digitization of quality
records.

41 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

42

The Environment

From the perspectives of environment conservation andcontribution to the bottom line of an organization, it is necessary
to reduce waste loss arising at production sites.
We will give top priority to products with high waste loss, andrespective corporate functions will provide necessary support
to pursue activities related to waste loss reduction.

Participation in Communities andCommunity Development

NOK globally publishes the “NOK Group Green Procurement
Guidelines,”which describe NOK's environmental policy and green
procurement policy. NOK is working to reduce the environmental
impact in the entire supply chain in cooperation with its suppliers byasking them to submit cooperation agreements to the“NOK Group
Green Procurement Guidelines”to ensure that suppliers are awareof NOK's environmental philosophy and policies and that they canprocure raw materials and parts in an environmentally conscious
manner.

Strengthening supply chain BCP / BCM

Quality Assurance

Promotion of Green Procurement

er confidence at all stages of research and development, design, production, sales, service, etc."

Practices

we at the NOK Group hold a seminar which covers key considerations for persons involved in procurement and patterns of act that
could be considered problematic as well as guidelines on how to“Return to the Basics of Quality”

Fair Operating

the Japan Auto Parts Industries Association have formulated and announced the "Initiative for Promotion of Fair Trading and Enhancement of Productivity-Added Value."
In response to these initiatives of the government and industry,"With quality first, we provide services and products with consum-

NOK Group Three-Year Quality Assurance Policy (2020-2022)

Labor Practices

based on the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises were revised, followed by the issuance of a
notification titled "Payment means for subcontracting."
In addition, the Japan Automobile Manufacturers Association andBasic policy

Priority Action Items

supply chain. And in December of the same year, the "Operational

Standards" of the Subcontract Act and the "Promotion Standards"

Basic Concept

Human Rights

Economy, Trade and Industry announced "Towards future-oriented
trading practices," an initiative aimed at ensuring "fair trading”and

Product Quality and Safety

Efforts in Dealing with Conflict Minerals
We at the NOK Group conduct procurement activities throughout

Corporate Governance

Building Relationships of Trust with Suppliers(Coexistence and Co-prosperity with Suppliers)

Quality AssuranceSociety

Quality Assurance

Quality Management System

Quality improvement activities

Quality assurance review (QA review) for the validation

In order to continue to supply products that meet the needs of ourcustomers, we at NOK have established a quality man­agement sys-of the quality assurance system

improvement thereof.
▶ Please refer to P. 71 for the list of quality management system(QA review). Specifically, we validate whether an implementation

tem based on international standards such as ISO9001, and we areoperating in compliance with the same and working on continuous

NOK is making unique efforts to improve quality in each of pro-

cesses from order receipt up to delivery.

The Quality Officers conducts on-site reviews for quality assurance

Quality Assurance Systemweaknesses by conducting production-site-driven reviews.

Overview of quality improvement activities
Management process

fectively implemented. However, in recent years, we are working on

global basis, thereby enhancing customer satisfaction.

Communication

Quality Control Department
Managers' Meeting

Product realization process

Customers

Order receipt

Design prototype

Field quality
Field quality
monitoring activities

engaged in quality activities. Its performance is evaluated throughquality assurance review (QA review) and management re­views ofbusiness divisions, which leads to effective and continuous improve-

Trailmass production

Initialmass production

Mass production

Customers

DeliveryJudgment at quality gates

Mass production
process improvement

Customer satisfaction

Special quality council

Nonconformity
Reduction Activities

Commendation by customers

Education / training

SuT Program

Human resource development

Quality Dojo

Motivation

In-house Quality Award System

Revitalization of the workplace

QC circle activity

Participation in Communities andCommunity Development

We have expanded the NOK quality policy and quality targets toall business divisions, and each business division has formulated aquality assurance activity plan (QA activity plan). In the quality assurance activity plan, priority action items and target values for achieving the quality goals are set, and these are concretely reflected in thework implementation plan of each department, with all departments

In this way, group companies in and outside Japan closely exchange information on the quality management system in an effort
to ensure that NOK's products have a uniform level of quality on a

Quality Assurance Review

Quality Assurance

quality activities in all departments

bases with an opportunity of not only deploying best practices presented by other operation bases but also "sharing of lessons learned
from their activities."

Audit/review

Support process

The Environment

Taking advantage of field quality data
Field quality monitoring activities

Quality Assurance System Overview
Policy/Decision Making

We at NOK use quality data of our products in the field to regularly

President

the analysis of field quality data. This activity also leads to improved
product quality. If we are successful in finding improvement measures based on past performance and/or the results of surveys andanalysis of our products in the field, we propose improvement mea-

Quality Officer

Control over the functions
involved in quality assurance, such as planning, coordination and promotion

Quality Control
Representative

Formulation of a QA activity plan and applicationof it to each department
and each manufacturingsubsidiary under control.

Quality Control Office
Quality Officer

Reports and Proposals

Overseas bases

QA review

Field

Customers
Proposal of improvement measures

sures to our custom­ers and work in collaboration with them.

Divisions

Divisions

Divisions

Factory

Factory

Factory

Responsible
personResponsible
personQuality Control
Representative

Responsible
personResponsible
personResponsible
personAs a mother factory
Production
Subsidiaries

43 NOK CORPORATION CSR REPORT 2020

Overview of field quality monitoring activities

monitor for any­thing that could lead to market complaints. This activity is called MFQ* activity and managed in a database and enables

Domestic Group Companies

Production
Subsidiaries• Product transfers and launch of overseas production• Support for quality assurance activities• Promotion of priority issues

Quality Control
Department Managers'
Meeting

Collection of actual products for survey

Sales department* MFQ: Abbreviation for Monitoring Field products Quality• Deployment of bestpractices• Sharing of lessons
learned• Grasp of customer
information• In-house
information
development

Database

Technology department(business division)• Actual product survey• Examination andimplementation of
improvement measures• Accumulation of our unique
technology

Practices

Quality Assurance Activity Plan (QA Activity Plan) that works on

Quality managers from domestic and overseas group companies
gather regularly to exchange information on the year-by-year development of priority implementation items and the activities status ateach site. This occasion provides gathered managers of operation

Quality Assurance Activity Plan

Fair Operating

the Quality Control Office is also involved in important matters associated with the above operations and strives to ensure smooth
implementation of such operations.

Quality Control Department Managers' Meetingthat has horizontal ties within the NOK Group to ensure mobility

Policy deployment

Labor Practices

functions involved in quality assurance, such as planning, coordina­tion and promotion for group companies’products. Each division de­velops a quality assurance activity plan in line with the NOK quality
policy, and the Quality Officer conducts quality assurance review(QA review) on site in a systematic manner.
In addition, the domestic mother factory takes the lead in supporting the launch of overseas production transfers, promoting quality
priority implementation items, and resolving quality problems, andHuman Rights

certified companies.

plan has been formulated based on an understanding of the inten­tion of the policy and whether quality improvement activities are ef­

At NOK, the Quality Officer also acts as a control center for the

Corporate Governancement.

Quality Management System

Quality assurance
department• Early detection ofabnormality by data
monitoring and analysis• Selection of survey target
products

NOK CORPORATION CSR REPORT 202044

Society

Quality Assurance

Quality Dojo Initiatives to pass down "Quality First thinking”

a newly developed product into mass production.
Special quality evaluation meeting

In ensuring the delivery of stable-quality products to customers,
we at NOK engage in problem prevention activities, in which we
divide the development of a new product from design to productionand (3) Initial mass production and have in place criteria that warrant
us to move on to the subsequent stage so that we can solve any
problem at an early point.

In particular, for products that involve new development, a "special

quality evaluation meeting" is held at each stage for members from

Activities Not to Make Nonconforming Products

Activities to reduce nonconforming products in conjunction with anunderstanding of the mechanism that causes such nonconformance

problem solving."
In early days of its launch in 2001, we had only eight courses forthe technology department. Since then, the program coverage has
expanded to include people from the manufacturing department
and group companies. In the time between, we have come to learnpeoples’education needs for more fundamental knowledge as wellas advanced techniques. At present, we have more than 20 courses
from basic "QC seven tools" to "multivariate analysis" and "design ofexperiments," and we have organized a curriculum so that advanced
methods can be learned through practical exercises.
SuT * is called "Satto," and many employees have participated in
the course and have applied the methodology they learned in it tovarious improvement activities such as QC circle activities and nonconformity reduction activities.
* SuT is an abbreviation for Speed-up Tools that is useful for speeding up the problem-solving process.

Disciples who have graduated from the Dojo are responsible forproviding guidance and training to their subordinates as their daily
routine in addition to their own quality improvement activities as primary duty.

Now that ten years have passed since the Quality Dojo was es-

tablished, the training curriculum has been improved to meet theneeds of each business division and group company, embarking on
a new stage.
QC circle activities perking up even abroad

The NOK Group encourages employees toform quality control (QC) circles: autonomous
small groups that engage in quality improvement activities.
These QC circles also provide a place for

their members’growth and personality formation through activities in which all the members of each circle endeavor to solve their familiar matters in the workplace, which leads
to revitalization of the workplace.
Every year, NOK Group companies hold activity presentations, andWhat organization will be chosen as thecompany's representative this year?
In-house Quality Award System

We at the NOK Group have a quality award system in place for the

purpose of boosting quality improvement activities.

Under this system, we encourage all employees of the NOK Group
companies in Japan to enter the system in units of their near actiongroup or organization in order to raise their awareness of quality.
Once every six months, we commend organizations that have actively promoted quality improvement activities and have achieved
excellent results.
Articles on the outstanding improvements they have achieved ap-

pear in company newsletters.
The previous award-winners include the logistic departments arm
as well as the production division, which indicates that the system
is used to help create a work environment where all departments
directly or indirectly make united efforts to promote quality improvement.

Articles of Quality Awards posted in company newsletterin fiscal 2019, a total of 1,267 circles from Japan and overseas participated in the event.
Three circles in Japan and five circles abroad, which had been se-lected through an activity presentation held at each company, took
part in the NOK Group QC Circle Convention, at which the best QC
circle is decided, and reported the results of their activities throughRoad for Qualification for the Group Convention

Article published in the NOK Group newsletter“Tanetomato”

and accidents.

Commendation by customers

Overview of SuT Program

SuT classroom scenery

ＮＯＫ
Domesticblock
2 circles

Overseas
China
block
2 circles

OverseasSoutheast Asiablock
2 circlesGroup
Company B
block
1 circle

Response surface method
Advancedcourse(Specialized
course)Intermediate
courseIntroductory
courseWeibull analysis
DRBFM etc.
Total of 1,267 circles
Multivariate analysis
Design of experiments
KT method, etc.

Scene of the NOK Group QC Circle ConventionGroup
Company C
block
1 circle

We at NOK have ourselves evaluated by customers in terms ofactual quality achievement and improvement activities.
Every year, we are commended by about 20 customers mostly inthe automobile industry in terms of quality.
However, the number of commendation cases decreased to 16
in FY 2019.
In this context, we will promote quality improvement activities inline with our quality policy and seek to gain our customers’trust bycontinuously delivering products that meet their requirements.
▶ Please refer to P. 71 for the status of acquisition of international
quality standard certifications.

Seven QC tools
QC story
Root cause analysis, etc.

45 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

46

The EnvironmentNOK Group QC Circle Convention* FTA: Abbreviation for Fault Tree Analysis, which is a method of analyzing failure

Participation in Communities andCommunity Development

one-by-one check up until nonconformity is precluded at all stages.
The“Zero Nonconformity Initiative,”as it is called, is devoted to a
multitude of technical subjects at operation sites on a yearly basis,
gaining a foothold and becoming independent at group companies
in Japan and abroad.
Basically, this project requires the repeated observation of gemba(actual place) gembutsu (actual thing) and genjitsu (actuality) andverification based on a certain mechanism. It has helped employees
to develop their abilities to solve problems on site. Results of theverification based on mechanisms are represented in an FTA* to be
managed as a unique technique for use in the future.

quired. To meet such needs of the times, we hold the "SuT Program"with a focus on diffusing the use of "tools that will help speed up

and education.

Quality Assurance

actions under which we, at the outset, take measures against one
specific nonconformity until the product has zero such nonconformity, and then, we take measures against another nonconformity until
the product has zero such nonconformity. In this way, we conductdata" which is one of the hallmarks QC-oriented thinking.
Nowadays, in the field of problem solving, speedy response is re-

the Quality Dojo training center and provide disciples with training

abroad.

Practices

ity and reduce on waste. In order to avoid causing troubles to customers, we are requested not to make nonconforming products
in manufacturing processes. To that end, we undertake a series ofbeen advocating the importance of logical analysis and improvement

based on facts and data with the motto "Let's say something with

Each division has quality trainers (Quality Dojo Masters) who run

Fair Operating

NOK strives to reduce nonconforming products to improve qual-

NOK provides quality control education for each level of the or-

ganization. Among others, in the field of problem-solving, we havefirst mind" in their daily work.

In the NOK Group, QC circle activities are extensively conducted
at many of our operation sites and group companies in Japan andLabor Practices

the responsible business division and relevant offices to conduct design review, and the Quality Officer makes the decision to move tothe next stage.

and practical operations based on Quality Control-oriented thinking

At NOK, we are working on the "Quality Dojo" as a place to develop human resources who can convey, practice and instill the "quality

This occasion marked the 67th convention after the lapse of 51

years from the 1st convention in 1963.

Human Rights

into three stages of (1) Design prototype, (2) Trial mass productionLet’s say something with data.

Improvement activities through quality control education

QC stories.

Corporate Governance

The Quality Officer decides the adequacy of putting

Society

Participation in Communities
and Community Development
NOK has sponsored "Kids Engineer" since FY2016.

Organized by the Society of Automotive Engineers of Japan, Kids

Engineer provides a hands-on learning opportunity for schoolchildren

As specified in the Principles of Corporate Behavior (Section 6) of

the NOK Charter of Corporate Behavior, we will, as a good corporate

Local communities are important stakeholders of the NOK Group.

We aim to be local companies loved and trusted by their local com-munities and to make these communities feel proud of us while

and is aimed at encouraging their interest in various fields of science,technology and monozukuri (manufacturing skills), particularly fields

Expenditure for Social Contribution
Activities and Percentage by Field
The Environment

3%

perity with local communities and engage in activities
that can contribute to their sustainability.

10%

12,409Crime Prevention /Disaster Prevention

Health / Medicine /Sports17%

Social / Local Area Activities

28%

Accepting internship participants, granting scholarships, and supporting events for next-generation development and school events

Health / Medicine / Sports

Participating in blood donation events, the Ecocap activities and medical assistance, sponsoring sports events,and supporting school sports events

Crime Prevention / Disaster Prevention

Participating in crime prevention activities, traffic safety activities, traffic safety patrols and disaster prevention activities,
and making visits to disaster-stricken areas

Local Community Activities/
Traditional Culture Conservation

Sponsoring local festivals, making donations to shrines, donating goods to the neighborhood,and inviting local residents to festive events at offices

The Environment

Participating in local cleanup activities, tree planting activities and activities for water purification by utilizing paddy fields, and recycling

Social Welfare

Making donations to the Red Cross and social welfare corporations(FY2019)

NOK has sponsored the "Student Formula Japan" hosted by theSociety of Automotive Engineers of Japan. This competition started
in 2003 as a program for the development of human resources forpractical manufacturing. Students form teams and compete in termsof comprehensive manufacturing abilities by conceiving an idea of anddesigning and producing an automobile. NOK has continuously sponsored this event since2008 to support young

engineers who are enthusiastic about buildingcars and manufacturing.
In addition to providing
our own products suchas oil seals, O-rings andseal washers to participating schools, we also ran abooth to support students

the products and demo machines on display

during the competition in
FY2019.

■ Support for Rebuilding an Elementary School
Academic / Research / Education■ Sponsorship for "NHK Student Robocon,""ABU Asia-Pacific Robot Contest”and "Robocon for Elementary School Students"

agrees with this objective and supports a wide range of students,from elementary school students to university and technical college(in the 4th and 5th years) students, as future engineers.

Since 2015, NOK has sponsored "NHK Student Robocon" and"ABU Asia-Pacific Robot Contest" in supporting future engineers as amanufacturing company. Furthermore, we started sponsoring "Robocon for Elementary School Students" from FY2019. Robocons are
events for young people to experience the fun of "thinking with theirown heads and making robots with their own hands" without beingbound by preconceived ideas and to thereby share the importanceof thinking of ideas and the magnificence of manufacturing. NOK

Humanitiesstudents

Sciencestudents

Total

Participants in 2-weekinternship program(university students)

0

28

28

Participants in 1-weekinternship program(technical college students)

0

16

16

Participants in 1-day
internship program

159

178

337

Participants in long-term(2-4 months) internship program

0

2

2

■ Sponsorship for the Student Formula Japan

NOK's booth. Students who arecurious about

Activity Example

NOK actively provided opportunities for students to undertake
work experience at a variety of workplaces within the company, withthe objective of human resource development through industry-academia cooperation.

The 2006 earthquake in Central Java, Indonesia, caused enormous damage. In 2008, PT.NOK Indonesia, our group company, incollaboration with PT.Eagle Industry Indonesia, helped rebuild an el-

Health / Medicine / Sports■ Sponsorship for a Local Professional Sports
Club TeamWe empathize with and sponsor professional sports teams that
aim to coexist and co-prosper with the local communities in which
our divisions are located, appreciating the roles that professional

sports play for the communities. With Kumamoto Volters, which
competes in the B.League and is one of the teams we sponsor, we
co-organized a basketball school at the gymnasium of our Kumamoto Plant for the purposes of interacting with children and revitalizing
the community through basketball. On the day of the event, 83 people, mainly junior high school students from Aso City and the municipalities in Aso District, participated.

ementary school that had collapsed due to the earthquake. Later, wevisited the elementary school in 2015 and 2020. Children welcomed
us, waving small flags of Indonesia and Japan and giving welcoming
music performance. This was a peaceful time from beginning to end.
In addition to donating TV sets and computers, PT.NOK Indonesia
made origami cranes and presented them to all the children in thehope that such present would help them know more about Japanese culture.

Basketball class held at the gymnasium of NOK Kumamoto Plant
Supportive Messages Posted In the Venue

47 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

48

The Environment

Academic / Research / Education■ Accepting Interns from Universities
and Technical CollegesParticipation in Communities andCommunity Development

Content Example

screen.

children

Quality Assurance

Category

Children listening to the staffas they gaze at theparts”in cars by actuallyseeing, touching and enjoying exhibits.

Photo taken with the employees at PT. NOK Indonesia and their

Practicesnel who can lead the future.

Academic /Research /Educationbooth. We preparedsome experiments to enable participants to feelthe“big roles”of“small

play big roles” at its

Fair Operating2．
We will work on developing next-generation person-

programworld of auto parts—
small components that

39%

Unit: 10,000 yen

a

Other

1%

Aggregate totalran

based on the theme“theLabor Practices

1．
We will work on realizing coexistence and co-pros-

Local Community
Activities/ Traditional
Culture Conservation

NOK

２%

growing together with them.

Fields Requiring Priority Initiatives

relating to automobiles.

Social Welfare

Human Rights

citizen, actively participate in local communities and contribute totheir development.

Corporate Governance■ Sponsorship for“Kids Engineer”

Basic ConceptSociety

Participation in Communities
and Community Development■ Tree Planting Activities

Since FY2018, NOK has sponsored the Minato City Half Marathon,

Corporate Governance■ Sponsorship for Minato City Half Marathon

Thai NOK Co., Ltd., our group company, participates in tree plant-a marathon race held in Minato Ward, Tokyo. In FY2019, 19 people

ing activities organized by the Amata Industrial Estate Authority every

from the NOK Group participated in the marathon and ran throughyear.

the city of Minato Ward together with nearly 5,000 runners. On the
day of the event, our employees lined up along the roadside to cheer

Human Rights

on the runners. In addition, as a local company, we livened up theevent by setting up a booth in the venue and holding a lottery for theentertainment of runners, spectators and local people.

Employee of Thai NOK Co., Ltd. taking a photo in front of a Thai

Picnic with children of Wuxi Kindergarten

templeThe Environment

Participated in tree planting activities sponsored by the AMATA
Corporation

servationcommunity cleanup, and waste reduction.

Social Welfare

Singapore Pte. Ltd., NOK Precision Component Singapore Pte. Ltd., Synztec Singapore Pte. Ltd.

■Support for People with Difficulty Living
Independently due to the Novel Coronavirus

Quality Assurance

Local Community Activities/ Traditional Culture Con-*NOK Asia Company Pte. Ltd., CORTECO Asia Company Pte. Ltd., NOK-Freudenberg*The environmental management system formulated by the Ministry of the Environment

Due to restrictions on economic activities in combating the novel coronavirus,“rice ATMs”have been set up in various parts ofVietnam to provide rice for free of charge in supporting burgeoning

unemployed people and people with difficulty living independently.
Vietnam NOK Co., Ltd., our group company, supports this activity,
having donated 1 ton of rice (for about 500 people).

Since FY2018, NOK, which has a plant in Aso City, Kumamoto
Prefecture, has sponsored "Hinokunimatsuri," which is a summer, traditional festival in Kumamoto Prefecture, for the purpose of regional
revitalization. In FY2019, more than 119 employees and their families
participated in the main event of the festival,“Otemoyan So-Odori,”and livened up the local event together with the locals.

Employees worked together to collect groceries■ Employees’Volunteer Activities

Cleaning activities on the coast of Enoshima in Shonan area, which

PT. NOK Freudenberg Sealing Technologies, one of the Group
companies located in Indonesia, made a donation to a Muslim orphanage and a Christian orphanage respectively with the hope of■ Kitaibaraki Zero Garbage Operation
In Kitaibaraki City, Ibaraki Prefecture, where NOK Kitaibaraki Plant
is located, we call on neighboring companies every year to join thecleaning of the coastline which extends over 17 km. During FY2019,
this event was held on May 19, and 53 people including our employees and their families participated in it.

We received a letter of appreciation from the management
organization of Amata Industrial Estate, Dong Nai Province, where
Vietnam NOK Co., Ltd. is located.

Photo wearing the NOK original happi coat

■ Employees’Volunteer Activities■Fund-Raising Activities for the Restoration ofThai Temples

NOK (Wuxi) Vibration Control China Co., Ltd., our group company,
puts its energy into volunteer activities as part of its social contribution. In FY2019, its employees went on a picnic to Jiulihe Wetland
Park with the children of Wuxi Children’s Welfare Institute*. The 25

In Thailand, a Buddhist country, temples are sacred places andvery much valued by its people. As a company rooted in this area,
Thai NOK Co., Ltd., our group company, conducted fund-raising activities in FY2019 with the aim of repairing the roofs of Nongakka
Temple and Santidham Temple.

employees who participated in the event enjoyed a recreational activity with children, singing and beating drums. The children weredelighted, and one of the employees who participated in the event
said,“I was glad that the children were happy,”and“They made me
happy.”
Participated in Kitaibaraki City Cleanup Campaign

building a brighter future for the children. They also spend meaningful time with children through various events. These kinds of social
contribution activities have become an annual tradition.

With children living in an orphanage*Homes for children with disabilities who do not have families or guardians.

NOK CORPORATION CSR REPORT 2020

50

The Environment

can be seen from NOK SHONAN R&D CENTER

49 NOK CORPORATION CSR REPORT 2020

Participation in Communities andCommunity Development■Sponsorship for the Local Festival "Hinokunimatsuri"

Practices

NOK logo

Since FY2019, NOK has sponsored the“Enosui eco”program promoted by Enoshima Aquarium (Enosui) for ecology under EcoAction
21*. NOK actively participates in beach cleanup activities, in addition to assisting in conservation efforts including investigation andresearch into the biological and ecological diversity of Sagami Bay,

Fair Operating

NOK Group employees supporting athletes waving a flag with the■ Beach Cleanup Activities as an Enosui Eco
Supporter

Employees of five companies* of the Group located in Singapore
jointly collected foodstuffs and donated them to charitable organizations. This activity aims to raise the employee awareness of theissues of hunger and food loss in the community.

Labor Practices■ Donations to charities

The Environment

Environmental Reportgarded as one of the social issues that must be resolved, and many

Social BackgroundIn recent years, a variety of environmental problems have emerged

achieve a sustainable society, we must reduce the environmental
burden in all aspects of our economic and social activities. In the
Sustainable Development Goals (SDGs), environmental issues are re-protect the environment. Companies are required not only to comply
with the regulations of each country, but also to contribute to therealization of a sustainable society by taking the environment into
account in their overall corporate activities.

Environmental Management of the NOK Group
With the Paris Agreement adopted in 2015 and the SDGs agree-

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

system. The Central Environmental Conservation Committee, chaired

ment towards 2030, society's perception of environmental issues ischanging. As activities to realize a sustainable society become moreand company-wide business policies. The Board of Directors is also

management,”which is a business activity that takes the environment
into account. This includes“companies’disclosure of climate-related

and opportunities and results. Under the supervision of the compa-

lated Financial Information Disclosure (TCFD) and the Science Basedby the President and Representative Director, meets twice a year
to determine risks and opportunities in environmental management

informed of important matters such as priority tasks of identified risks
ny-wide environmental conservation supervisor, the company-wide
environmental secretariat and the Subcommittee for Reduction ofEnergy Consumption are leading actual environmental conservation

NOK’s Policy

President

We will promote energy conservation to prevent global warming, reuse andrecycle resources, and reduce waste toward a recyclingoriented society.

3

We will set targets at the NOK Central Environmental Conservation Committee and work together with our suppliers and otherrelated companies to make continuousimprovements in reducing environmental burden. We will also strengthen our efforts tomanage chemical substances, prevent global environmental pollution, and enhance our efforts to reduce water use.

4

We comply with related laws and regulations, local government ordinances, and regional agreements, etc., and promote activities
for environmental conservation.

5

We comply with self-imposed restrictions by the industry and customers, and positively try to meet the expectations of our
stakeholders toward environmental issues.

6

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

7

As a good corporate citizen, all employees recognize the importance of biodiversity and global environmental conservation and will
strive to raise awareness of the global environment, as well as continuously improve our environmental management system.

Enacted on September 17, 2001, revised on April 1, 2018

President of NOK CORPORATION
Chairman of Central Environmental
Conservation Committee

Kiyoshi Doi

Director of Environmental Management(General Manager of Environmental Control Office)Company-wide
Environmental
Secretariat

Cooperation

Subcommittee for
Reduction of Energy
Consumption

PlantsFormulation of Long-term Environmental Vision for 2030
Amid the worsening issues of climate change and energy caused

by global warming, the NOK Group formulated the “NOK Twin
Green Plan 2030”in 2018 in response to the SDGs adopted by theUnited Nations, and has since been promoting environmental conservation activities. However, with the emergence of global climate

NOK Group has decided to review its total CO2 emissions targets
and promote environmental conservation activities in light of international environmental conditions such as the Paris Agreement, TCFD,
and SBT.

NOK Twin Green Plan 2030
Green Factory

Green ProductThrough measures for environmentally friendly production,
we will reduce CO2 emissions from factories by 30% from the
FY2018 level.

We will promote the development of products that willcontribute to next-generation environmentally friendly
technologies.

Initiatives

Initiatives• We will develop production facilities that will reduce energy
consumption by 20% compared with the existing ones.

• W e will develop products that contribute to the spread of nextgeneration energy-saving technologies such as fuel cells.
 e will contribute to the reduction of environmental impact•W
by developing low friction technologies that will make low fuelconsumption possible.
• We will develop functional membranes that will contribute to water
recycling (hygienic water supply and circulation).
• We will thoroughly control chemical substances in our products andimprove their environmental quality.

• We will actively promote the use of renewable energy.

• We will strive for waste reduction and a 100% recycling rate.

• We will work on reducing water use and ensure cleaner wastewater.
• We will thoroughly oversee and reduce the use of hazardous
chemicals in processes.

Relevant SDGs

51 NOK CORPORATION CSR REPORT 2020change, which further requires measures against climate change, theRelevant SDGs

NOK CORPORATION CSR REPORT 2020

52

The Environment

2“development of environmentally friendly products;”“measures onsubstances of concern;”and“biodiversity.”To realize a sustainable
society, we will continue to fulfill our social responsibility by promoting environmentally friendly business activities and provide environmental value to society by providing products that contribute to theenvironment.

Participation in Communities andCommunity Development

Based on the company’s unique conventional technology, we promote the improvement of technology and development of
products, as well as strive to reduce environmental burden.

The NOK Group established the“NOK Twin Green Plan 2030,”along-term environmental vision for the year 2030 as its environmental management, and has been engaged in environmental conservation activities such as“measures against climate change;”“resource
conservation and recycling;”“conservation of water resources;”

Quality Assurance

1(Chair: President)

conformity with the realization of the Paris Agreement.

Practices

Basic Policies on Environmental Conservation

Central Environmental Conservation Committee

Targets (SBTs), which is scientific CO2 emission reduction targets inFair Operating

In the NOK Group, all employees are aware that our business activities, products, and services are widely involved in the environmental impact on a global scale. The company set its basic environmental policy to contribute to realizing a society where sustainable development is achieved. Under this policy, the company will promote environmental conservation activities such as "measuresagainst climate change;" "resource conservation and recycling;" "conservation of water resources;" and "development of environmentally friendly products;" as well as fulfill its corporate social responsibility by complying with laws and regulations. In addition, thecompany will actively disclose environmental information and contribute to realizing a sustainable society by creating shared value
with communities and society.

financial disclosure”recommended by the Task Force on Climate-re-Labor Practices

activities, with each workplace carrying out environmental conservation activities in accordance with the environmental targets andpolicies.

active, companies are strongly urged to carry out“environmental

Human Rights

and are affecting our lives. To solve environmental problems andcountries are tightening environmental regulations and working toEnvironmental Management System
To promote our environmental management activities smoothly

Corporate Governance

Basic Concept

The Environment

Input resources and industrial waste in business activities"Challenge to the Next Generation Environment”

The 7th Corporate Environmental Conservation Targets (FY2017 to FY2019) Slogan:

Initiatives and Goals
Category

Measures against

Waste and Recycling【Reduction of CO2 Emissions】Development of energy-saving equipment for production processes/Reduction of CO2
emissions in logistics processes/Introduction of renewable energy
CO2 emission intensity

Environmentallyfriendly products

Previous year

P.55

P.57

○

×

Reduction by more than 1%【Resource conservation】Promoting resource conservation through design and process changes, optimization ofmaterial input, etc.
【Waste reduction】Promoting product non-conformity measures and recycling, reducing the amount of waste
disposal in landfills by converting waste to recyclable materials, and improving the recycling rate
Japan

ation

-

P.60

Raw Materials

Total raw material input

91(1,000 tons)

Rubber13(1,000 tons)

Additives & Adhesives

11(1,000 tons)

Plastics

1

Metals66

Total energy input
P.61【Reduction of environmental burden】
Reduction of VOC emissions【Create and expand use of efficient environmental hazardous substances survey system】
Continuing of voluntary
audits on environmental quality/promotion of green procurement
VOC emissions

Japan

FY 2000

P.63

○

○

Reduction by more than 50%

Development of environmentally friendly products and continuous promotion of environmental conservationassessment of products

P.65

○

Category

1,218 (1,000 tons-CO2)(1,000 tons)

NOX (Nitrogen Oxides) *2

0.0

kg

SOX (Sulfur Oxides) *2

145

kg

Volatile Organic
Compounds (VOC)

1,884

t

Procurement

3,103

TJ

Gasoline

5

TJ

Kerosene

3

TJ

Heavy Oil A

38

TJ

Light Oil

2

TJ

Liquefied Petroleum Gas
(LPG)

68

TJ

City Gas

17

TJ

Management System

Scope ofCoverage

Baseline Year

Target【Fostering and establishing an environmental climate】Promoting environmental contribution activities tailored to the characteristics ofeach region【Improving the management level of the environmental management system】
Promoting and expanding education by rank anddeveloping environmental human resources/Reducing environmental protection risks through a steady PDCA cycle【Strengthening the prevention of environmental nonconformity】Promoting environmental risk assessment of equipment and facilities
Development of energy-saving equipment for production processes/Reduction of CO2 emissions in【Reduction of CO2 emissions】
logistics processes/Introduction of renewable energy

Measures against
Climate ChangeElectricity ConsumptionJapan

FY2018CO2 emissions

Global

FY2018Reduced by 10%

Previous year

An average reduction of more than 1% overthe past five years

CO2 emission original unit

Waste and Recycling[Resource conservation] Promoting resource conservation through design and process changes, optimization of material inputs, etc.
[Waste reduction] Promoting product non-conformity measures and recycling, reducing the amount of waste disposal in landfills by converting waste to recyclable materials, and improving the recycling rate
Waste Recycling Rate

Conservation of Water
Resources

Measures against
Environmentally
Hazardous Substances
Environmentallyfriendly products

Japan

Reduced by 10%

Japan

-

Maintaining at rate of more than 98%

Checking the volume of Japan and international water withdrawals and wastewater/Controlling an increase in water withdrawals
Total water withdrawals

GlobalPrevious year785

1,000mCity Water

565

1,000m3

Industrial Water

37

1,000m3

Ground Water

183

1,000m3

3

Wastewater

Total volume ofwastewaterRiversSewage system
BOD load*3

Production
・Life CycleAssessment (LCA)・Pollution Prevention
・C h e m i c a l S u b s t a n c e sControl
・Energy Conservation
・Waste Reduction
・E n v i r o n m e n t a l I m p a c t
Assessment

520

1,000m3

473

1,000m3

46

1,000m3

1.5

t

Industrial waste, etc.

Total Discharge of Waste

45(1,000 tons)

Total industrial Waste

15(1,000 tons)

Amount of waste
recycled

14.4(1,000 tons)

Final disposal

0.3(1,000 tons)

Valuable waste

28(1,000 tons)

Environmentally Hazardous Substances

Logistics

Substances of concern

Chemical substances subject
to the Pollutant Release
1,422
and Transfer Register (PRTR)
system・Environmental Impact
Assessment
・Green Procurement
・Environmental Conservation
Inspection of Machinery andEquipment

・Efficient Transportation
・Promotion of Modal Shiftt

Customers

Chemical substances
subject to the Pollutant Release and Transfer Register(PRTR) system (discharge

19

t

55

t

volume)Chemical substances
subjected to the Pollutant
Release and Transfer Register (PRTR) system (amountof movement)*1. Total CO2 emissions: Calculated based on the "greenhouse gas emissions accounting and reporting manual.”
The emission factor is based on the national emission factor bycountry published by the“International Energy Agency.”*2. NOx (nitrogen oxides) and SOx (sulfur oxides): Total amount of NOx and SOx generated from specified facilities under the Air Pollution Control Act.
*3. BOD load: Biochemical Oxygen Demand (BOD) is one of the indicators of water pollution and represents the amount of oxygen used by bacteria to decompose pollutant
organic material in water.Here, the BOD load is calculated by multiplying the BOD measurement concentration by river discharge.

Controlling an increase[Reduction of environmental burden] Reduction of VOC emissions【Strengthening chemical substance management system】Promoting green procurement (Thorough management of chemical substances by suppliers)
VOC emissions

Global

FY 2010Less than FY 2010 results

Development of environmentally friendly products/Improving the level of environmental conservation assessment in products

53 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

54

The Environment

Environment

Item

8 (1,000 tons-CO2)

Participation in Communities andCommunity Development

Initiatives and Goals

Scope 1 (Fuel)Scope 3
(Indirect Emission)

TJ

Total water withdrawals‘Creating"Corporate Value’by‘Increasing Environmental Value,’Step 1”

１７８ (1,000 tons-CO2)(1,000 tons)

Water
The 8th Corporate Environmental Conservation Targets (FY2020 to FY2022) Slogan:・Environmental Conservation
Assessment of Products, etc.
・Environmental Impact
Assessment

CO2 emissions(Scope 1 + 2) *1

169 (1,000 tons-CO2)

3,236

Purchased power
Monitoring the water withdrawals and wastewater volume in and outside Japan

DesignScope 2(Power and Heat)

Energy○Maintaining at rate more than 98%

Gas emissions

Quality Assurance

Substances of Concern

Japan

sult

OUTPUT

Practices

Measures on

YearEvalu-

Fair Operating

Resources

Coverage

Target【Preventing environmental problems】Compliance with environmental laws and regulations【Maintenance and improvement of environmental management system】Elimination of operational problems

Waste Recycling Rate
Conservation of Water

Baseline

Re-

Labor Practices

Climate Change

Scope of

FY 2019 NOK Group (Japan)

INPUT

Human Rights

Environmental
Management System

Item

Corporate Governance

NOK's Mid-Term Goals

The Environment

the NOK Group establishments with ISO 14001 certification is 97.8%.

ture activities to reduce our environmental burden, NOK conducted

External Inspection
NOK has a third-party organization inspect mainly the company’sproduction sites involving in environmental burden and have themacquire and maintain the ISO 14001 certification. In fiscal 2019, there
were no significant findings and the company received an evaluationthat the management system is operating properly and undergoing

Environmental audit
At NOK, the Environmental Management Office is in charge of envi-

by explaining global environmental trends and newly enacted laws,
as well as how NOK will respond to environmental matters in the

future. We will continue to engage in environmental activities with
our suppliers and related companies so that we can work together
in the supply chain to contribute to reducing environmental burden.

Environmental Education

emergency situations, thereby, raise the environmental awarenessof every employee.

Practices

The NOK Group conducts a variety of education programs to foster a company-wide environmental climate. The NOK Group conducts education by rank for its employees and specialized education including ISO 14001 management, energy, waste, and chemical
substance management, as well as education in preparation for
Conducting courses on the environment

Quality Assurance

conducted for efforts by NOK's 28 group companies in the Kyoeikai
association on reduction of CO2 emissions and waste, as well as theirenvironmental impact, which is promoted by NOK, and awards arepresented to companies that have contributed to the reduction of
their environmental burden. Isshin Industries Corporation was awarded the prize for best performance in FY2019 for its excellent energy-saving activities. We will continue to work with our supply chain
to promote activities to reduce our environmental burden.
Cooperative association with other companies

Item

education

Specialized
education

The Environment

FY 2019 results

Level-specific

Participation in Communities andCommunity Development“Kyoeikai”mutual prosperity association
To communicate NOK's environmental policy and promote the reduction of environmental burden in cooperation with related companies, NOK established an award system for environmental initiatives
starting in fiscal 2019. Under this system, a performance evaluation isEnvironmental audit

Contents

The number ofattendees

New employee training

Basic education on environmental conditions and corporate
environmental protection activities

160

General employee education

Environmental conditions and the status of NOK, environmental
protection activities, etc.

1,100

Education for management position

Environmental conditions and the status of NOK, environmental
protection activities, etc.

509

Emergency-related education

Education for environmental accidents and emergency response

636

Education for internal auditors

Education for ISO 14001 auditors

28

Waste-related education

Proper waste disposal

3

Energy-related course

Course for energy managers

4

Chlorofluorocarbon-related course

Act on Rational Use and Appropriate
Management of Fluorocarbons etc.

1

Chemical substances-related education

Education on the management of toxic and hazardous materials

80

Total

55 NOK CORPORATION CSR REPORT 2020

Fair Operating

and regulations, and the management of environmentally hazardous
substances. The results of audit are reported to the president andheads of business units for prompt correction and improvement. The
company strives to improve its environmental performance and reduce environmental risks by reflecting the results in our environmental protection management policy as necessary.

In addition, the president attends the annual meeting where in-spectors report on the results of their inspections, so that the valuable opinions of the third party on NOK's environmental management can be reflected in management.

during fiscal 2018 through fiscal 2019. It was a meaningful opportunity for the company to communicate NOK's environmental policy

Labor Practices

ronmental audit and periodically checks and evaluates the operationof the management system, compliance with environmental laws

continuous improvement.

environmental workshops for 53 employees of the Group companies

Human Rights

ment environmental management with the next generation in mind,
thereby reducing environmental burden. The current percentage ofEnvironmental Communication
Environmental education for the group companies

To develop the company’s environmental policy and promote fu-

NOK establishes a system in accordance with the ISO 14001 stan-dard, promotes environmental management, and strives to imple-

Corporate Governance

Environmental Management System

NOK exchanges information on environmental issues with othercompanies to contribute to realizing a sustainable society. In addition to learning about environmental approaches and measurestaken by other companies, NOK also introduces case studies of its
efforts and tries to reduce environmental burden through mutual cooperation among supply chains. In fiscal 2019, NOK participated in
the cooperative association's CO2 reduction management group andvisited member companies (nine companies) to experience their actual conditions and seek hints for solutions to common issues. At an
event held at the Shonan R&D Center, we introduced a case on the
improvement of air leaks as a case study of NOK's energy efficiency.
NOK will continue to contribute to reducing environmental burden
through exchanges with other companies.

Status of compliance with environmental laws and regulations
During FY 2019, the NOK Group was involved in no fines, penalties
or lawsuits related to environmental incidents or complaints.

2,521

NOK CORPORATION CSR REPORT 2020

56

The Environment

Energy Conservation through Heat Dissipation Measures

GeneralSocial Background

Logistics

In recent years, climate change, such as rising tempera-

temperature rise to well below 2 degrees Celsius, and striving for 1.5

168

2. Capital goods

37

bonding site to reduce the amount of heat dissipation by 15kWh/day. In addition, the load on air conditioners has been reduced by

3. Fuel- and energy-related activities

we added a thermal cover to the outside of the firing furnace at the• Promotion of idle stop

• Frequent lights off, automatic• Optimization of distribution
routeslights on/off

Equipment was introduced to improve the efficiency of compres-sor operation control. Real-time analysis of pressurized air demandand supply capacity allowed the compressors to run more efficiently,
reducing energy consumption and CO2 emissions.

• Reducing fuel consumption by
improving loading rates

Production

NOK’s Policy0

15. Investment

412• Retrofit

Total

681

• Power saving of facilities

Process monitoring*Category 9, 10, 11, and 12 are not included in the total due to the difficulty incalculating them at present.

Total CO2 emissions of the NOK Group

NOK’s CO2 Intensity in Japan(1,000 tons CO2)

(ton-CO2/1 million yen)

• Visualization of operational
statusTarget Fiscal YearCO2 emissions
Reduction
Target2018

395[1,000 tons-CO2]

2030(Global)Reduction
Target2018

1.419[ton-CO2/million yen]

2019

1.405

1.350

50
2017

2018

2019

2030 (FY)

1.300

2015

Target Intensity

Target Figure

This fiscal year’s results

Reduction by 30%

Reduced by 8.2%

CO2 emissions

CO2 emissions

277 [1,000 tons-CO2] or below

363 [1,000 tons-CO2]

Reduction by 1%

Increased by 0.28%

CO2 emissions
Intensity

1.400

CO2 emission intensity

CO2 emission intensity

1.405[ton-CO2/million yen]

1.423 [ton-CO2/million yen]

(Domestic)

2016

2017

2018

2019 (FY)Original Unit

Evaluation○
CO2 emissions
Achieved 2.5% or more/year
×
CO2 emission intensity
Reduction by 1% or more/
Annual target unachieved*CO2 conversion coefficients for electricity are based on "CO2 Emissions from Fuel Combustion" of the International Energy Agency (IEA).
*CO2 emissions per intensity:“CO2 emissions per intensity = CO2 emissions/production value.”

57 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

58

The Environment

0

1.423

1.450

8.2%

150

an increase by 0.28%. NOK will continue to reduce CO2 emissions on

Baseline Figure

Reduced by

200

a global basis and strive to reduce our CO2 emissions per intensity
through improvement in production efficiency and other measures.

1.500

CO2 emissions

250

100

Baseline
Fiscal Year

FY 2019300

Participation in Communities andCommunity Development• Visualization of power
consumption

1.600
1.550

350

uted to the reduction. For this reason, NOK was unable to meet its
target for a 1% reduction in CO2 emissions per intensity, which was

TargetTarget Reduction by30%

450
400

• Upgrading to high efficiency
equipment-

Quality Assurance

while the results for the current fiscal year include the effects of CO2
emission reduction activities such as energy-saving measures for facilities and the introduction of renewable energy, a decrease in production due to economic slowdown might have significantly contrib--

14. Franchise• Shifting motors and pumps, etc.
toinverter type

• Repair of air leak

10. Processing of sold products
11. Use of sold products• Improvementof production
efficiency• Use of renewable energy• Optimization of operating
conditions

-

-

Motor

To achieve the CO2 emissions target of the“NOK Twin Green Plan
2030,”which is to“reduce CO2 emissions by 30% from the fiscal year2018 level,”we need to reduce CO2 emissions by 2.5% or more per
year. During FY 2019, NOK Group's CO2 emissions reduced by 8.2%,
achieving a reduction in CO2 emissions by more than 2.5%. However,0

9. Downstream transportation and distribution

0• Control and reuse of heatdissipation and waste heat

Targets and Results2

8. Leased assets (upstream)

13. Leased assets (downstream)

Production facilities• Optimization of air

conditioning operation

1

7. Employee commuting

12. End-of-life treatment of sold products

Factory building• Upgrading to high efficiency
equipment

7

6. Business travel

Practices

product lifecycle by developing energy-saving equipment to reduceenergy consumption during production in the manufacturing sector,
reducing fuel consumption of transportation equipment in the distribution sector, and introducing renewable energy throughout thecompany.

10

5. Waste generated from operation

Fair Operating

The NOK Group is working to reduce CO2 emissions, a major
greenhouse gas, and will contribute to the prevention of global
warming. NOK is striving to reduce CO2 emissions across the entire

4. Transport and delivery (upstream)Labor Practices• Improvement of vehicle fuelefficiency

degrees Celsius compared to pre-industrial levels. Companies alsoneed to take a proactive approach to energy conservation and the
reduction of CO2 emissions as part of their management strategies.

Shifting Compressors to Inverters (PT.NOK Indonesia)

44(Not included in Scope1 and2)

Human Rights

conservation efforts, have increased with the goal of limiting global• Switching to LED lighting

CO2 emissions

1. Purchased products and services

CO2.

world, threatening the survival of humanity in the future. With the Par-

(1,000 tons CO2)

Category

At NOK’s plant in China (Wuxi NOK-Freudenberg Oilseal Co., Ltd.),

about 20 kWh/day, resulting in an annual reduction of 46.4 tons-

tures,droughts,and sea level rise, have been progressing all over theis Agreement coming into force at the United Nations in 2016, activities for reducing CO2 and other greenhouse gases, as well as energy

FY 2019 Scope 3 Breakdown

Concrete Activities

Corporate Governance

Measures against Climate Change

The Environment

Activities of Subcommittee for Reduction ofEnergy Consumption

Based on the NOK Twin Green Plan 2030, NOK engages in con-of reducing CO2 emissions from plants by 30% compared with FY

2018 through environmentally friendly manufacturing initiatives.

In FY 2019, NOK continued to laterally expand effective measures that were validated in FY 2018 or before, such as the replacement and maintenance of LED lighting and top-runner mo-

control and reuse of heat dissipation and waste heat from production facilities to achieve both comfort and energy conservation. We will continue improving our activities through the expansion and new development of energy conservation measures.

Deputy General Manager of Manufacturing Technology Office
Chair of the Subcommittee for Reduction of Energy Consumption

tem for more robust energy conservation management by adopt-

generating a large amount of waste, and we are facing various prob-

lems such as the depletion of natural resources and environmental
destruction. Today, shifting from a mass-production, mass-consump-tion, mass-waste society to a recycling society is globally called forand businesses are required to promote the efficient use of resources
taking into account the entire product lifecycle from the procurementof raw materials to disposal and 3Rs (Reuse, Reduce and Recycle).

NOK’s Policy
The NOK Group has been promoting the 3R initiative (reuse, reduce, and recycle) to realize a recycling-oriented society. The Group
strives to contribute to a sustainable society and to enhance our

Figure 1: Effect of thermal barrier sheet (left: before
improvement, right: after improvement)such as plastic products containing metallic components in industrial
waste and recover metals from these products, thereby reducing theamount of industrial waste by 43.6 tons.
Reduction of sludge disposal (China)

At a plant in China (NOK (Wuxi) Vibration Control China Co., Ltd.),
due to the aging of the facility, the treatment efficiency was low, andthe water content of sludge after treatment by the filter press was
about 80%, so the dehydration (volume reduction) efficiency was
low. By introducing a new type of filter press, the water content ofsludge has been reduced to about 60% and the plant was able toreduce the sludge disposal weight by 6 tons per year.

corporate value through a range of measures throughout the product life cycle, including the efficient use of raw materials, water, andenergy as well as waste reduction and recycling of resources by improving each process.

Targets and Results

Figure 2: Individual heat exhaust hood
(Temperature °C)
50

The temperature around the press dropped by 5°C.

402030" to achieve a 100% recycling rate.

35

Visualization of power consumption

25

NOK provides IoT-based tools for visualizing energy consumption
to promote a higher level of factory energy management activities.
The visualization tool is now in operation at all business units andis becoming an aid for energy management activities. NOK is also
working to expand the visualization of power consumption laterally
to satellite companies under its jurisdiction. At the same time, NOK
will develop application software that enables advanced analysis
and provide tools that facilitate more user-friendly and familiar energy management.

20

Tuesday

WednesdayThursdayFridayFigure 3: Temperature around the vulcanizer (blue: before
improvement, red: after improvement)
Power company

Plant building 1
Power receiving andtransforming facilities

Resource Conservation
At the Kumamoto Plant, we worked to reduce the amount ofrubber fabric made of fluorine material, which is difficult to dispose

Facilities
By
distribution
panelboard

OthersVulcanizer

Secondary
vulcanizing
furnace

Distribution
panelboard

TargetTarget Items

FiscalYear

Continuous efforts toconserve resources

TargetFigureThis fiscal
year’sresults

-

-

-

2030

0t

345t

Industrial waste
landfill disposal
amount(Domestic)By
equipment
Molding Compre
Air
Light
machine -ssor conditioner

Figure 4: Example of power monitoring level and output(Domestic)

tion
-

○
Achieveda recycling
rate ofIndustrial waste, etc.
recycling rate

Evalua-2019

More than
98%

99.2%

more than98%

Recycling rate = (1 - Amount of landfill disposal/(Amount of industrial waste +Amount of valuable materials)) x 100

4

31

20
0

recycled

Chemicalconversion
coating60

60

25
2013 2014 2015 2016 2017 2018 2019 (FY)

■ Amount of waste

Power consumption DB
By power
receiving andtransforming
facility

80

40

Concrete Activities
MondayThe NOK Group's waste output(1,000 tons)

The Environment

45

conserve resources, such as reviewing the shape of molds and theappropriate weight of rubber fabric, as well as measures to prevent
product non-conformity, promote recycling, and turn waste into valuable resources; thereby, we will promote the "NOK Twin Green Plan

Participation in Communities andCommunity Development

NOK's recycling rate for fiscal FY 2019 was 99.2%, achieving morethan 98 percent of its goal. Due to the waste (landfill) from the foundry in Tottori Prefecture, which started operating in the second halfof FY 2017, the amount of waste disposed of in landfill in FY 2018
was 1,241 tons, but in FY 2019, the amount of waste disposed ofin landfill was reduced to 345 tons because we were able to recycle it, and the recycling rate improved to 99.2%.The NOK Groupwill continue to reduce the amount of waste by taking measures to30

59 NOK CORPORATION CSR REPORT 2020

Recycling of waste as valuable resources (Japan)
At the Kitaibaraki Plant, NOK has been able to sort out waste

Quality Assurance

ing section of the vulcanizer is efficiently collected, and heat exhaust
hoods were installed for each piece of equipment to suppress heatdissipation into the workspace (Figure 2).
As shown in Figure 3, the temperature around the vulcanizer
dropped by about 5°
C after improvement, leading to energy savings
by reducing the air conditioning load and heater load.

sumption and mass disposal. At the same time, we are consuming
a large amount of the earth's finite resources and energy, as well as

Practices

the right is the surface temperature after the installation of thermal
barrier sheets on the inside of the facility to control heat dissipation.
The effect of the heat-dissipating sheet is evident and the surface
temperature is lowered, which means that heat dissipation is suppressed.
As for waste heat, exhaust heat from the product loading/unload-by many things in a social system of mass production, mass con-improvements in the process.

Fair Operating

Development of Energy-Saving Equipment
The following is an example of introducing equipment that reduces the air conditioning load of the work area and the heater load ofthe equipment while maintaining a comfortable work environment
by improving heat dissipation and waste heat of rubber vulcanizing
equipment.
We examined measures for improvement, including optimallyinstalling heat insulators and securing an adequate exhaust airflow
passage to address heat released from the machine and exhaust
heat, which degraded the working environment. A small model isused for preliminary testing to develop effective measures.
Figure 1 is a thermograph that verifies the effect of thermal barrier sheets on the surface temperature of vulcanization equipment.
On the left is the surface temperature before improvement, and on

Yushi Nakahata

We have been living a convenient and prosperous life surrounded

Labor Practices

tors, and the introduction of renewable energy, and introduced
them to its plants. We also promoted the establishment of a sys-

ity used as thermal energy. For this reason, in the developmentof construction methods and equipment, NOK has improved theof as waste, and achieved a cumulative reduction of 0.8 tons throughSocial Background

Human Rights

tinuous and strategic energy conservation activities with the goal

ing IoT technology to visualize power consumption at out plants.
s manufacturing process for mainly
On the other hand, NOK’rubber products is characterized by a high percentage of electric-

Corporate GovernanceWaste and Recycling

Subcommittee for Reduction of Energy Consumption■ Amount of valuable waste ■ Final landfill disposal
amount

NOK’s final landfill disposal amountand waste recycling rate (domestic)

99.2

(t）
1,600
1,200

Target figure (Recycling rate)

97.5

800

95.0

345

400
0

(％）

100.0
98.0

92.5

2013 2014 2015 2016 2017 2018 2019 (FY)■ Final landfill disposal amountRecycling rate

NOK CORPORATION CSR REPORT 2020

60

The Environment

Water Risk Assessment
The NOK Group conducts water risk assessments on a global

basis to efficiently promote response measures to water risks. The
Baseline
Fiscal Year

Monitoring the water
withdrawals andwastewater volume(Global)FY 2019

1,900,000 m3

Social Background
Currently, the global shortage of water resources is an issue dueto the increase in water use because of population growth and thedevelopment of developing countries. Increasing climate change canalso change the pattern, intensity and frequency of rainfall, lead-ing to the instability of water resources, including the expansion of

Results of Wastewater Volume1,158,000 m3

drought-proneareas and severe flood damage. To address thesewater risks and create a sustainable society, it is becoming more

about water risks, Reverse Osmosis (RO) water is generated at the*AQUEDUCT: A water risk assessment tool published by the World Resources

recycling system, the company was able to reduce water withdrawals by 68,559 m3/year. The Vietnam plant (Vietnam NOK Co., Ltd.)

tained by using AQUEDUCT*, operated by the World Resources Institute (WRI), are as follows:
Institute (WRI).It provides a world map information on water risks such as "quantityof water," "water quality," "regulations," and "reputation.”

16%

1,900

(1,000 m3）

７%

2,000

NOK’
s Policy

500
0

2017

2018

2019

■ Medium-high■ Low-medium■ Low

RO unitRaw water(FY)

Sand Activatedfiltration carbon
tower adsorption
tower

TO DI
PROCESSBack
wash

NOK Group’s wastewater(1,000 m3）

The study revealed that the two most water-stressed production
sites out of a total of 44 sites are located in Thailand and China. NOK
will continue to monitor and control water withdrawals on a global
basis and promote activities for reducing water withdrawals in areas
with high water risks to conserve water resources. When building a
new plant, NOK conducts water risk assessments and promote production that takes into account water withdrawals and wastewater.

1,158

1,400
1,050
700
350
0

2017

2018

2019

(FY)

Controlling the increase in water
withdrawals compared tothe previous year globally

Watering
the garden
on thepremises

Brine waterROtank
water tank

Groundwater conservation (Japan)
As an external initiative to protect water resources, NOK has participated from FY 2019 in a groundwater recharge project in the Kumamoto region promoted by the Kumamoto Groundwater Foundation. Farmers who own paddy fields in a groundwater recharge area
and companies and organizations that sign an ownership agreementwith each other grow rice together. The water stored in the fields
percolates into the ground and promotes groundwater recharge.
This contributed to the conservation of water resources with an estimated annual groundwater recharge volume of 3,043 m3.

The NOK Kumamoto Plant is registered in the paddy field ownersystem as part of its environmental conservation activities. An
opportunity to learn about the "Land of Water Kumamoto. ”

61 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

62

The Environment

Three-year target (2020-2022)

Sanitary
wash water

Participation in Communities andCommunity Development

spectively. In the production process, the NOK Group reduced water
withdrawals by changing the number of cooling towers used that use
water by introducing water-saving and water circulation equipment
and optimizing the use of cleaning water. However, due to a slightincrease in actual water withdrawals in FY 2019 compared with FY
2018 and growing concerns about water risks globally, the NOKGroup has set a clear three-year (FY2020-2022) goal of“controllingthe increase of water withdrawals globally. ”
To achieve the goal, theNOK Group is actively promoting internal water withdrawals reduction activities and participating in external water resource conservation activities, such as groundwater recharge activity, to conserve
water resources both in and outside the company.

64%

Bases

■ HighQuality Assurance

The NOK Group has been promoting the monitoring of water withdrawals and wastewater volume at each plant globally to reducewater withdrawals. The actual water withdrawals and wastewater
volume during FY 2019 were 1,900,000 m3 and 1,158,000 m3, re-

1,000

RO-deionized water system■ Extremely highPractices

Targets and Results

44

1,500

also collects wastewater from the RO system into a water storage

Fair Operating

The NOK Group strives to conserve water resources by monitoring
and reducing the amount of water used in the manufacturing processof its products and ensuring that wastewater is clean. In addition,
the NOK Group assesses the water risks in each country and region
to respond to different water risks depending on the country andregion, and promote water resource conservation activities tailoredto the characteristics of each country and region.

13%

reduce the amount of water withdrawals. By establishing this watertank (for reuse) to spray the water on plants and trees around thefactory, reducing water withdrawals by 3,780 m3/year.

Water stress
NOK Group’s total water withdrawals

plant for use in the product production process. Brine water generated in the process is reused for toilet flushing and other purposes toLabor Practices

and more important for businesses to make effective use of water
resources.

At the Thai plant (Thai NOK Co., Ltd.), where there are concerns

results of the study on water stress at global production bases ob-

Human Rights

TargetResults of Water
withdrawals
VolumeConcrete Activities
Recycling of water resources (Thailand, Vietnam)

Corporate GovernanceConservation of Water Resources

The Environment

Corporate Governance

Measures on Substances of Concern

Concrete Activities
Reduction of VOC emissions

At the Kumamoto Plant, the company planned to reduce theamount of VOC treatment fluid used for product surface treatment

Social Background

Targets and Results

Chemical substances are essential to our lives, but they also cause

The NOK Group's VOC emissions during FY 2019 were 3,101

tons, keeping its VOC emissions below the group’s target of 4,447

human health and the environment" set forth at the 2002 Earth Sum-ny can maintain or reduce VOC emissions. The company will also

Achieving the goal "Achieve by 2020 that chemicals are used andproduced in a way that minimizes the significant adverse effects on
mit (WSSD). Aiming for this, regulations on substances of concern are

becoming stricter year by year in each country.To protect the Earth's

NOK’s Policy

products covered by its efforts.

study the development of technologies to prevent an increase in

Promotion of Green Procurement
Please refer to P. 41 for promotion of green procurement.

increased production. In addition, the NOK Group conducts a self-environmental quality inspection every year in order to build and maintain a management system that does not include environmentallyhazardous substances in its products. Continuously in FY 2019, theEnvironmental Quality Self-Inspection
The NOK Group periodically conducts a self-inspection on its management system to build and maintain a management system that
does not include substances of concern in its products. Based on a

Total VOC emissions of the NOK Groupenvironmental secretariat conducts site checks as necessary to reinforce the management system to prevent environmentally hazardous
substances from being contained at all companies.

VOC emissions when the use of organic solvents increases due to

NOK Group's production sites were inspected, and the management
system for substances of concern was checked by identifying areas
for improvement in the management system and processes.

Practices(t）
5,000 Target Figure

checklist, the substances of concern management system is inspected for each process from the procurement of raw materials to shipment of products at each of the company’s global production bases
to identify areas for improvement. In addition, the company-wide

Quality Assurance

4,000

3,101
3,000

Participation in Communities andCommunity Development

2,000

1,000

0 2010Baseline Fiscal Year

Baseline Figure

Target

2016

2017

2018

This fiscal year’s results

2019 (FY)

Environmental Quality Self-Inspection

The Environment

Target Items

2015

Evaluation○

Target VOC Emissions

2010(Global)

VOC emissions

4,447 tLess than FY 2010 results

3,101 t

VOC emissions
Achieved VOC emissions
less than FY 2010 results

FY 2019 PRTR Results
Substance Name

Emissions (kg)CabinetAmount of Movement (kg)Order No.

Atmosphere

Public Waters

Landfill

Soil

SewageOff-site

1

0

21

0

0

0

0

228

164

0

0

0

0

164

N,N-Dimethylformamide

232

71

0

0

0

0

11,790Toluene300

18,547000043,189Methylnaphthalene

438

0

0

0

0

0

2

Methylenebis (4,1 - Phenylene) = Diisocyanate

448

79

0

0

0

0

348

18,862

21

0

0

0

55,493

Water-Soluble Zinc Compounds
3,3'-Dimethylbiphenyl
4,4'-Diyl=Diisocyanate

Total

63 NOK CORPORATION CSR REPORT 2020

Fair Operating

NOK believes that it is one of the social responsibilities of a company to comply with chemical substance regulations and customers’
self-imposed standards, which are becoming stricter every year. For
this reason, the NOK Group will reduce the substances of concern
used and emitted in the production process, grasp and manage
chemical substances throughout the product life cycle, and contribute to reducing the environmental impact of the entire supply chain.

per year. NOK will continue to reduce VOCs by expanding a range ofLabor Practices

ecosystems and prevent negative impacts on people, companies are
required to comply with various regulations and to manage and reduce chemical substances throughout the entire product life cycle.

tons. NOK will continue to seek ways to reduce emissions from adhesives and paints at each stage of production so that the compa-

Human Rights

problems such as destruction of ecosystems and damage to people.

and developed an application method using short nozzles in FY
2019. As a result, we can expect a VOC reduction effect of 66.4 kg

NOK CORPORATION CSR REPORT 2020

64

The Environment

Social BackgroundIn recent years, the world has become aware and concernedchange, resource depletion, waste disposal and increased demand
for water resources. In order to reduce those risks and create ament

Oil seals, O-rings, gaskets, electromagnetic
shielding rubber (EM Guard), mechanicalseals, metal bellows, etc.

sustainable society, we cannot ignore the environmental burden of
products we use on a daily basis. Businesses are required to de-velop products and technologies that are useful for environmental
procurement of raw materials to manufacturing, transportation, use
and disposal. They are also required to use renewable energy to help
solve environmental issues including the problems of climate change
and resource depletion, etc.

of end products to perform functions to protect the environment,such as“not emitting or leaking,”“transferring efficiently,”“reducingburden,”and“extending the life of the product.”NOK is committed
to providing products that“help realizing a sustainable society”anddeveloping new technologies to that end.

low waste and recycling.

NOK tracks the amount of investment and costs required for en-Standard of Environmental Impact Assessment for Design

vironmental conservation in its business activities each year with the

Design・Production

tion efforts, aiming to achieve sustainable development.
During FY 2019, NOK introduced high-efficiency air conditioners,

Diffusion ofsubstancesof concern

Use

Use of resources• Improved product yields• Resource byconservation downsizing• Longer service life of
products• Non-use of
substances ofconcern

Energy consumption• Product
design withenvironmentalload process
selected

Waste
Occurrenceof disposal• Reuse• Low waste
design for easy
disassembly,
recycle design• Minimizing heat dissipation
range of molding machine• energy-saving equipment
maintenance design by adoption of energy-saving parts• Energy-saving design by
low friction of products

Extending the life of products
Le-µ's technology, special lubricant grease,special coatings, etc.

aim of efficiently and effectively promoting environmental conserva-

switched to LED lighting, and improved its wastewater treatment facilities as energy-saving measures.NOK is also introducing solar panels, which also serve the purpose of business continuity management(BCM).

Trend of Environmental Investments and Costs (Millions of yen)
FY
Environmental preservation
investments

Application of the Standard of Environmental Impact
Assessment for Design in FY2019
Product development related to new energy (fuel cell)
Cell seal for fuel cell, humidifying membrane
modules, etc.

Gain on sales of recyclable materials : 1,413 million yen

PlantsApplicable
Cases

Number of improvements (cases)

Fukushima

847

99

Kitaibaraki

1,231

25

Fujisawa (SHONAN R&D CENTER)

124

79

Shizuoka

810

18

Tokai

21

17

250

250

101

74

Total

3,384

562

2018

2019

587

923

899

Environmental preservation costs

805

850

473

Total

1,392

1,773

1,372

(Millions of yen)
2,000

1,372

1,500

473

1,000

899

500
0

2017

2018

Environmental
preservation investments

2019

(FY)

Environmental
preservation costs

NOK Environmental Accounting（Millions of yen）
Invest-Category

Main Contents

Business Area Costs

Environmental conservation costs to control environmental burden caused by business activities
within business area

576.1

258.2

Costs

ment

Pollution Prevention Costs

Investment in and maintenance and management costs related to pollution prevention activities

117.2

102.2

Global Environmental Conservation Costs

Investment and maintenance and management costs related to global warming countermeasures
including energy conservation

454.5

64.7

Resource Circulation Costs

Investment and maintenance and management costs related to resource recycling activities including
waste disposal and recycling

4.4

91.3

Upstream and Downstream Costs

Costs of controlling environmental burden that occurs in upstream and downstream such as green
procurement, etc.

00Management Activity Costs

Costs associated with management activities such as ISO14001 maintenance and operation

0

106.4

Research and Development Costs

Costs of research and development that contributes to the environment such as the development ofenvironmentally friendly products

323

107.1

Social Activity Costs

Costs related to greening of business establishments and support for the activities of environmental
conservation groups

00.5

Costs involved in dealing withenvironmental damage

Costs associated with the removal of environmental burdens such as special equipment and facilities

0

0.7

899

473

Fines, penalties and/or legal costs associated with the settlement of environmental accidents and complaints
Total
Aggregate total

65 NOK CORPORATION CSR REPORT 2020

0
1,372

NOK CORPORATION CSR REPORT 2020

66

The Environment

Tottori
Kumamoto

2017

Participation in Communities andCommunity Development

All NOK products contribute to the environment by supporting ourcustomers' products behind the scenes.
NOK's products backed by technologies have a wide range offunctions, including sealing, fluid control, vibration and sound isolation, low friction and membrane separation.These NOK products areintegrated into our customers' products and are used in a variety

products, coating products, wastewater treatment membrane modules, separation membrane modules, etc.

life; low friction and low wear performance; reuse of products; and<Economic Effect of Environmental Conservation Measures>
Energy saving effect: 78.6 million yen

Quality Assurance

Environmentally friendly NOK products

Reducing burden on products and the environment
Vibration and sound isolators, special lubricant

gy-saving design; improved product yields; downsizing; longer service

Landfill disposal volume reduction: 896 tons

Practices

In order to contribute to the reduction of environmental burden,
the NOK Group is developing products that contribute to next-generation eco-technologies, taking into account the entire product lifecycle from procurement of raw materials to manufacturing, transportation, use and disposal.

Le-µ's technology, iron rubber products, accumulators, solenoid valves, actuators, thermallyconductive rubber, etc.

Taking the entire product life cycle into account, NOK is working
on various designs including disuse of substances of concern; ener-

Fair Operating

NOK’s Policy

Efficient transfer of energy

NOK's Standard of Environmental Impact Assessment for Design.

Labor Practices

conservation taking into account the entire product lifecycle fromnew materials and new production machines in accordance with

Effects of Environmental Conservation and Economic Effect<Effects of Environmental Conservation>
CO2 emissions reduction: 2,809 tons-CO2

Human Rights

about the risks associated with the environment, such as climate

Not generating and emitting substances that impact the environ-

Environmental Impact Assessment for Design
We assess the environmental impact of designs of new products,

Corporate Governance

Environmentally friendly products

Data sheet

The Environment

Social BackgroundOur life is supported by the various benefits of biodiversity, such as

are essential for the continued existence of all humanity. In recent
years, an increasing number of living organisms have been becoming
extinct due to the destruction of the natural environment, overfishing,and climate variability, leading to a rapid decrease in biodiversity.
Conservation of biodiversity is positioned as one of the critical glob-

supporter, NOK assists in conservation efforts, including survey research into the diversity of living organisms and habitat environment
in Sagami Bay, beautification and waste reduction in the region. In

addition, NOK proactively takes part in beach cleanup activities tobuild a relationship with the local community, thereby contributing
to biodiversity conservation.

enterprises also need to carry out their business activities with a sensitivity to conservation of biodiversity and the natural environment.

NOK’s Policy

As at the endof FY2018

As at the end

Number of auditors

10

9

8

Of which, the numberof outside directors

2

2

2

Of which, the numberof female auditors

0

0

0

As at the endof FY2017

As at the endof FY2018

As at the end

5

5

5

Composition of auditors

Participation in cleaning Lake Ezu sponsored by the Kumamoto Prefectural Environmental Conservation Council (Japan)
We took part in an activity to conserve Lake Ezu in Kumamoto
City, which represents "the city having the best-quality groundwaterin Japan." Specifically, we eradicated weeds at the edge of the lake,
which led to the improvement of the living environment of aquatic
animals and plants as well as maintenance of a leisure area for Kumamoto residents.

Number of auditors
Of which, the numberof outside auditors

3

Of which, the numberof female auditors

0

3

0

FY2017FY2018FY2019Directors

322

296

289

Of which, the number of outside
directors

14

12

12

of FY2019• The directors’remuneration for FY2019 includes remuneration granted to aboard director who stepped down as a director as of October 31, 2019.
 he directors’remuneration for FY2018 includes remuneration for one director•T
who retired from the position of board director at the conclusion of the 112th
Ordinary General Meeting of Shareholders held on June 27, 2018.

Auditors’Remunerationof FY20193(Millions of yen)
FY2017FY2018FY2019Number of Auditors

62

60

59

Of which, the number of outside
auditors

18

18

18

0

Political Donations
Board of Directors* A space which enables various wild creatures that originally live in the region tolive in it

As at the end

As at the endof FY2017

of FY2018

of FY2019

Number of board of
directors’meetings held
(Held on paper)

14
（1）

14
（0）

13
（2）

Average attendance
rate

97.1%

97.7%

98.2%

As at the end

As at the end

As at the endof FY2017

of FY2018

of FY2019

12

11

9

96.7%

92.7%

97.8%

Result

FY2017FY2018FY20190

0

0
The Environment

Installation of a mini-biotope on factory premises (Japan)
We at Tosu NOK have set up a mini-biotope* in the compound
where we rear killifish and dragonfly nymphs. Through the operationand expansion of this mini biotope and the dissemination of in-house
information on the growth status of the creatures, we are working toraise employee awareness of biodiversity and awareness of environmental conservation.

As at the end(Millions of yen)

No political donations have been made in the past ten years.

Board of Statutory Auditors

Number of board of
statutory auditors’
meetings held

Average attendancerate

67 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

Participation in Communities andCommunity Development

NOK promotes biodiversity activities based on the characteristicsof the region in cooperation with local governments and residents,
including environmental cleanup and tree planting activities in theneighborhood of its factories. We will continue to contribute to society through biodiversity conservation activities.

As at the endof FY2017(Millions of yen)

Quality Assurance

Concrete Activities

Remuneration of Directors and Auditors

Practices

our business activities and emphasizes the necessity to promote biodiversity conservation activities based on the characteristics of theregion.

Composition of the board of directors

Fair Operating

We at NOK Group assessed the impact and dependence of ourbusiness activities on biodiversity and ecosystem services. Basedon the results, we identified the way to go from the perspective of
biodiversity conservation and established a uniform internal regulation“NOK Standards for Biodiversity Conservation”in FY2011. This
standard defines the biodiversity-related efforts we should make in

Corporate GovernanceLabor Practices

al issues among the SDGs, with countries across the world making
efforts toward that end. To create a sustainable society, businessecological actions sponsored by Enoshima Aquarium (Enosui). As a

Corporate Governance

Human Rights

the provision of food and water and stable climatic conditions, which

Support for eco-supporters (Japan)
We provide support for the“Enosui eco”program for ecology andCorporate GovernanceConservation of Biodiversity

68Data sheet

Year Month
2004

Apr.

2006

May.

Established Accounting Audit Division
Established Basic Policy forInternal Control System

Enacted and declared Management Principles, Management Policies, and Principles of Corporate

Behavior.

Behavior.

Enacted the Behavioral Guidelines
Concerning Employee Compliance.

Established Risk Management Rules
Established Management Rules forInternal Control Subsidiaries
Established Internal Control Rules for

2008

Jan.

2009

Jun.

Established the Internal Control Audit
Committee
Introduced the Executive Officer System.

Jun.

Committee

2016

May.
Jun.
Oct.

Started assessing the effectiveness of theBoard of Directors.
Increased the number of external
directors to two.
Established the CSR Committee
Established the Central BCM Committee.

2017

Jan.
Mar.

2019

Jan.

Established Seals Segment
BCM Committee
Established Electronics Segment
BCM Committee
Business Continuity Management Rules

Japan

9,420

9,807

10,158

10,78911,001

China

16,296

14,683

12,774

11,681

10,913Development of an internal control system, audit of its operational status and proper maintenance.
Separation of management oversight and executive functions, and the establishment of an agile
management system.

The Management Oversight Council(composed of the President and Representative Director, external directors and auditors).

Number of Central Labor

16

Management Councils held

Southeast Asia

20,89023,00319,891

18,651

17,395

263

688

706

1,130

1,183

Diversity

Total

46,86948,181

43,52942,25140,492

Employment of disabled persons* On a consolidated basis(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019

Europe and the United States

20

15

16

16

(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019

Composition of employees (by type of employment) (As of March 31, 2020)
FY2015 FY2016 FY2017 FY2018 FY2019
Regular employees

3,085

3,143

3,248

3,419

3,529

Non-regular employees

424

431

427

410

389

Total

3,509

3,574

3,675

3,829

3,918

* On a parent basis

FY2015 FY2016 FY2017 FY2018 FY2019
Male

2,404

2,448

2,535

2,677

2,747

Female

681

695

713

742

782

Total

3,085

3,143

3,248

3,419

3,529

1.96

Rate of employment

Average age(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019

Introduction of long-term performance-based and performance-linked compensation system.

Male

40.4

40

40

40

40.1

Integrated "Internal Control Subsidiary Management Rules”and other internal control related

Female

38.3

38.9

39.5

39.8

40.1

regulations

Overall

39.9

39.7

39.9

39.9

40.1

1.98

2.06

2.06

2.06

* On a parent basis

Ratio of women in managerial positions(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019
Domestic

N/A

N/A

N/A

0.52

0.82

Overseas

N/A

N/A

N/A

29.23

28.10

* On a consolidated basis

Work-life Balance
Hours worked per employee/
Average number of days of annual paid leave taken(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019* On a parent basis
Actual total hours worked
per employee

Overtime worked per
employee(on an annual basis)

2,110.6

2,117.8

2,100.1

2,096.2

2,041.7

267.4

273.8

256.1

253

205.8

13.6

13.5

13.5

13.6

14.5

* On a parent basis

Minimizing risk probability and losses through cross-organizational verification and evaluation.
Average length of continuous service

FY2015 FY2016 FY2017 FY2018 FY2019

Strengthening the management oversight function.
Improving the effectiveness of the Board of Directors

Male

17.7

17.1

17.1

16.9

17.1

Female

18.1

18.6

18.8

18.9

19.3

17.8

OverallStrengthening the management oversight function.
Raising the awareness of CSR throughout the company and promoting effective CSR activities.
Increasing the effectiveness of the business continuity plan and contributing to the improvement ofcorporate value.
Built and maintained BCM within the segment as a sub-organization of the Central BCM Committee
Built and maintained BCM within the segment as a sub-organization of the Central BCM Committee
Established Business Continuity Management System(As of March 31, 2020)

17.5

17.4

17.4

(As of March 31, 2020)

Employee retention status

FY2015 FY2016 FY2017 FY2018 FY2019
Rate of turnover

1.2

1.2

1.1

1.3

Check, assessment and advice on key management issues and serious risks.

Average number of days ofannual paid leave taken* On a parent basis

Number of employees who took childcare leave

1.0

Male

0

0

1

0

1

Female

51

47

53

53

60

* On a parent basis

Number of employees who took nursing care leave

Hiring of new graduates(As of March 31, 2020)
FY2015FY2016FY2017FY2018FY2019

Male

100

102

87

115

117

Female

19

23

25

32

34

119

125

112

147

managerial track

Male

0

0

0

0

0

Female

1

0

1

0

0

* On a parent basis

Number of persons reemployed(As of March 31, 2020)
FY2015FY2016FY2017FY2018FY2019

2.9

3.1

4.4

6.1

5.2

(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019

151

Rate of hiring of new female graduates for the

Hiring ratio(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019* On a parent basis

Overall(As of March 31, 2020)

FY2015 FY2016 FY2017 FY2018 FY2019

17.6* On a parent basis* On a parent basis

Jul.

Number of labor-management conferences held

Male

166

202

210

223

209

Female

4

6

5

6

6

* On a parent basis* On a parent basis

69 NOK CORPORATION CSR REPORT 2020

NOK CORPORATION CSR REPORT 2020

70

The Environment

One external director took office

FY2019Composition of employees (on the basis of gender) (As of March 31, 2020)

management system.

Established the Risk Management

FY2018Established methods for establishing and evaluating internal control related to financial reporting

to one year.

Established Internal Control Rules

FY2017

Participation in Communities andCommunity Development

2015

Established matters to be instructed to subsidiaries and matters to be observed by subsidiaries

Separation of management oversight and executive functions, and the establishment of an agile

system.

Jul.

Established how to deal with business risks and emergencies

Changed the term of office of directors
Revised the executive compensation

2013

Established handling of compliance with laws and regulations and company rules and regulations

FY2016

Quality Assurance

financial reporting

Enacted and disseminated guidelines on matters to be complied with by employees.

(As of March 31, 2020)

FY2015Practices

Oct.

Established Basic Policy for Internal Control System

Composition of employees (by region)

Fair Operating

Mar.

Established as an internal audit department

Enacted the NOK Charter of Corporate

Established Compliance Rules

2007

Preventing and minimizing negative impacts on business continuity.

Labor-management relations

Employee situation

Labor Practices

Aug.

OfficePurposeHuman Rights

Jul.

PolicyEstablished the Crisis Management

Corporate GovernanceLabor Practices

Efforts to Enhance Corporate GovernanceData sheet

The Environment

List of quality management system certified companies
Country

Certified companies(business divisions/business establishments)

Fukushima Plant

ISO 9001

7-Mar-14

ISO 9001

7-Mar-14

Tenei Seal Industry Corporation
Fukushima Factory

ISO 9001

7-Mar-14

Miharu Industry Co., Ltd., Head Office’s Factory

ISO 9001

7-Mar-14

Miharu Industry Corporation, Shirasawa Factory

ISO 9001

7-Mar-14

Tohoku Seal Industry Corporation

ISO 9001

7-Mar-14

Miyagi NOK Corporation, Miyazaki Factory

ISO 9001

7-Mar-14

Miyagi NOK Corporation, Tome Factory

ISO 9001

7-Mar-14

Nihonmatsu Seal Kogyo Kabushiki Kaisha

ISO 9001

7-Mar-14

Kitaibaraki Plant

ISO 9001

3-Sep-07

Isohara Polyurethane Industry Corporation

ISO 9001

15-Dec-14

Shizuoka Plant

ISO 9001

9-Oct-13

Nihonmatsu Plant

ISO 9001

9-Oct-13

Tsukuba Plant

ISO 9001

9-Oct-13

MYK Corporation

ISO 9001

9-Oct-13

Kikugawa Seal Industry Co., Ltd.

ISO 9001

9-Oct-13

NOK METAL Co., Ltd.

1-Mar-03

Kitaibaraki Plant

ISO14001

2-Mar-11

Isohara Plant

ISO14001

2-Mar-11

Toyoda Plant

ISO14001

2-Mar-11

Shirasawa Plant

ISO14001

18-Apr-19

Fujisawa Plant

ISO14001

2-Mar-02

Shizuoka Plant

ISO14001

1-Mar-03

Tokai Plant

ISO14001

1-Mar-03

Tottori Plant

ISO14001

2-Mar-05

Kumamoto Plant

ISO14001

5-Mar-04

Headquarters Factory

ISO14001

31-Mar-06

ISO14001

2-Apr-12

Nonodake Factory (Headquarters)

ISO14001

26-Jan-07

Kawamata Factory

ISO14001

26-Jan-07

Kawamata Factory (Kogami)

ISO14001

26-Jan-07

ISO14001

2-Mar-11

Tome Factory (former Senboku Industry)

ISO14001

10-Mar-06

Miyazaki Plant (former Miyazaki Industry)

ISO14001

2-Mar-06

ISO14001

31-Mar-06

ISO14001

10-Feb-06

Fukushima Factory: QMS-certified

Kawamata Factory (Nihonmatsu):

TVC Co., Ltd.

ISO 9001

3-Jun-09

Kumamoto Plant

ISO 9001

30-Sep-98

Nonodake Factory (Headquarters)

ISO 9001

Scheduled to acquire in March 2021

Kawamata Factory

ISO 9001

Scheduled to acquire in March 2021

Nihonmatsu Seal Industry Corporation

QMS-certified as a NOK CORPORATION plant

ISO14001

2-Apr-12

Kawamata Factory (Kogami)

ISO 9001

Scheduled to acquire in March 2021

Isohara Polyurethane Industry Corporation

QMS-certified as a NOK CORPORATION plant

ISO14001

2-Mar-14

Kawamata Factory (Nihonmatsu)

ISO14001

27-Mar-07

ISO14001

25-Feb-13

ISO14001

13-Mar-15

ISO14001

18-Apr-19

ISO14001

2-Mar-11

ISO14001

9-Mar-07

ISO14001

14-Feb-07

QMS-certified as a NOK CORPORATION plant
Miyagi NOK Corporation

Japan

Miharu Industry Corporation
Tohoku Seal Industry Corporation

Scheduled to acquire in March 2021

ISSHIN Industries Corporation

ISO 9001

28-Nov-11

KANASEI Corporation

KANASEI Corporation

ISO 9001

13-Apr-11

ISO 9001

7-Feb-01

ISO 9001

7-Nov-08

ISO 9001

27-Mar-04

Kusu NOK Corporation

Head Office’s Factory: QMS-certified
Kikugawa Seal Industry Co., Ltd.

MYK Corporation

Kumamoto NOK Corporation

Headquarters Factory

ISO 9001

24-Mar-04

TVC Co., Ltd.

The First Factory

ISO 9001

24-Mar-04

Saga NOK Corporation

ISO 9001

24-Mar-04(former Saga Seal Industry Co., Ltd.)ISO 9001

25-Jun-08

Oil Seal Production

IATF 16949

28-Jan-18

Kusu NOK Corporation

Vibration Control Production

IATF 16949

24-Jan-18

Tos NOK Corporation

Rubber Seal Production

IATF 16949

2-Feb-18(former Tos Seal Industry Co., Ltd.)Aso NOK Corporation(former Kawazu Industry Co., Ltd.)

Vietnam NOK Co., Ltd.
PT. NOK Indonesia

28-Mar-07

ISO14001

28-Mar-07

ISO14001

14-Apr-08

ISO14001

28-Mar-07

ISO14001

28-Mar-07

Panthong Plant

ISO14001

16-Jul-07

Bangpakong Plant

ISO14001

16-Jul-07

Aso NOK Corporation

IATF 16949

26-Jul-17(former Kawazu Industry Co., Ltd.)

15-Apr-07

IATF 16949

17-Apr-18

Changchun NOK-Freudenberg Oil seal Co., Ltd.

IATF 16949

12-Jun-18

Taicang NOK-Freudenberg Sealing

ISO 9001

5-Feb-18

Products Co.,Ltd.

IATF 16949

5-Feb-18

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

IATF 16949

15-Mar-19

NOK (Wuxi) Water Treatment Technology Co., Ltd.

ISO 9001

Scheduled to acquire in December 2020

* This list covers establishments engaged in seal production among overseas group companies.

28-Mar-07

ISO14001

Nichinan NOK Corporation

ISO 9001

Wuxi NOK-Freudenberg Oil Seal Co., Ltd.

ISO14001

The First Factory

10-Dec-14

13-Jun-18

as a NOK CORPORATION plant

Headquarters Factory

27-Nov-17
27-Mar-03

Head Office’s Factory: QMS-certified

Kumamoto NOK Corporation

ISO 9001

ISO 9001

Head Office’s Factory: QMS-certified(former Kumamoto Seal Industry Co., Ltd.)IATF 16949

IATF 16949

PT. NOK Freudenberg Sealing Technologies

as a NOK CORPORATION plant
as a NOK CORPORATION plant(former Kumamoto Seal Industry Co., Ltd.)
Nichinan NOK Corporation

Fukushima Plant

ThailandThai NOK Co., Ltd.

VietnamVietnam NOK Co., Ltd.

ISO14001

1-Sep-09

PT. NOK Indonesia

ISO14001

12-Oct-04

PT. NOK Freudenberg Sealing Technologies

ISO14001

15-Oct-07

Wuxi NOK-Freudenberg Oil Seal Co., Ltd.

ISO14001

3-Dec-03

Changchun NOK-Freudenberg Oil seal Co., Ltd.

ISO14001

22-Jun-06

Indonesia

China

The Environment

3-Jun-09

ISO 9001

71 NOK CORPORATION CSR REPORT 2020

2-Mar-02

ISO14001

17-Oct-07(former Tos Seal Industry Co., Ltd.)

China

ISO14001

Fukushima Plant, Fukushima Site

ISO 9001

Tos NOK Corporation

Indonesia

Fukushima Plant, Nihonmatsu Site

as a NOK CORPORATION plant

ISSHIN Industries Corporation

Thai NOK Co., Ltd.

Date of acquisition

ISO 9001(former Saga Seal Industry Co., Ltd.)

VietnamTenei Seal Industry Corporation

Status of EMS
acquisition

Tottori Plant

Saga NOK Corporation

ThailandNOK CORPORATION

Scope of application

Participation in Communities andCommunity Development

NOK METAL Co., Ltd.

ISO14001-certified companies

Quality Assurance

NOK CORPORATION,
Precision Moldings ＆ O‐rings Division

Country

Practices

NOK CORPORATION,
Vibration Control Division

Date of acquisition

Tenei Seal Industry Corporation
Head Office’s Factory

NOK CORPORATION, Tokai Plant

Japan

Type of standards

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

ISO14001

5-May-08

NOK (Wuxi) Water Treatment Technology Co., Ltd.

ISO14001

Scheduled to acquire in FY 2022

* This list covers establishments engaged in seal production among overseas group companies.

NOK CORPORATION CSR REPORT 2020

Fair Operating

NOK CORPORATION,
Gaskets ＆ Boots Division

Operating site

Labor Practices

NOK CORPORATION,
Plastics ＆ Polyurethane Division

List of ISO14001-certified companies

Human Rights

NOK CORPORATION, Oil Seal DivisionCorporate Governance

Quality Assurance72Data sheet

Third-Party Opinion on CSR Report 2020
opinionEnvironmental Performance Data
INPUT
Item

Unit

FY2017FY2018FY20191,000 tons

91

96

91

Rubber1,000 tons

15

14

13

Compounding ingredients and adhesives

1,000 tons

11

12

11

Plastics

1,000 tons

1

1

1

Metals1,000 tons

63

69

66

TJ

6,519

6,946

6,536

Electricity

TJ

6,394

6,770

6,362

Fuels

TJ

124

176

174

1,000 m3

1,780

1,898

1,901

City Water

1,000 m3

1,464

1,504

1,466

Industrial Water

3

1,000 m

172

212

252

Total consumption of raw materials

Total energy consumption

Total water withdrawals

Ground Water
Consumption of substances subject to PRTR

1,000 m3

144

182

183

1,000 tons

1.5

1.2

1.4

OUTPUT
Item

Unit

FY2017FY2018FY20191,000 tons of CO2

379

395

363

Scope11,000 tons of CO2

8

11

11

Scope2

1,000 tons of CO2

371

384

352

Scope3*681

Total CO2 emissions (Scope 1 + Scope 2)

1,000 tons of CO2

186

192

NOx

kg

0

0

0

SOx

kg

137

130

145

VOC emissions

1,000 tons

3.7

3.5

3.1

t

245.5

133.6

18.8

Emissions of substances subject to PRTR
Total wastewater discharge

1,000 m3

1,308

1,182

1,158

Public Waters

1,000 m3

583

456

497

Drainage

1,000 m3

725

726

660

BOD load

t

1.42

1.47

1.45

Industrial Waste

1,000 tons

42

38

29

Amount of waste recycled

1,000 tons

35

32

25

Landfill disposal amount

1,000 tons

8

5

4

Valuable waste

1,000 tons

28

35

31

Recycling rate

%

89.0

92.8

93.1

* For Scope 3

for FY2017 to FY2018 : The aggregation range shall cover categories 1, 2, 3, 4, 5, 6, 7, 8, 13 and 14.
For FY2019: The aggregation range shall cover categories 1, 2, 3, 4, 5, 6, 7, 8, 13, 14 and 15.

Categories 9, 10, 11 and 12 fall outside the aggregation range because of the current difficulty in calculating.

Aggregation range for the past record of environmental performance
Page

Item

INPUT

P.54

associated with business activities

P.65

Environmentally friendly products

Targets andResults
Environmental
accounting

INPUT

P.73

EnergyNOK Group companies based in JapanWater

NOK Group companies based in Japan

Gas emissions
OUTPUT

Measures on Substances of Concern

NOK Group companies based in Japan

Substances of concern

Input resources and industrial waste

P.63

Aggregation range
Raw Materials

Environmental Performance Data
OUTPUT

73 NOK CORPORATION CSR REPORT 2020

On a parent basis
NOK Group companies based in JapanAs I read the CSR Report 2020, the first thing I noticed was apractices its responsibility to multiple stakeholders by looking

reconfigured with a focus on the relationships between different
contents. As a result, the entire Report has become more reader-model.
If my comment above is an accurate interpretation of the newsteady improvement from the last edition. This year, the Report isfriendly with a stronger storyline. For example, new sections
have been added at the beginning of the Report, including theNOK Group’s history, social contribution through products andintroduction of the Group’s products. These additional sections
make it easier for readers to understand the value provided by

the Group from the Report. This is a significant step forward as
it is usually difficult for BtoB companies to present their value.
Related to this point is that the Report identifies the areas inwhich the Group makes contributions while connecting theseareas to the SDGs, which should deepen readers’understanding
effectively. This change has been made to incorporate the thirdparty opinion on the last edition, exemplifying the Group’s sincere
attitude toward its stakeholders. Considering the reference to
ISO 26000:2010 Guidance on Social Responsibility, it is clearthat the Report has been edited so that it can be effectively
used as a communication tool for multiple stakeholders. From
this perspective, it seems safe to say that the Report has alreadyreached the stage of completion.
In the meantime, throughout the Report, I also noticed signsof movement toward the next stage. For example, the top
message emphasizes the sustainability of business activities,
which has developed from the basic policy of the new MediumTerm Management Plan,“Flexible response to changes and rechallenge to be a sustainable company.”As a company thathas a number of products with high market share, the message
focuses on the importance of the Group’s responsibility to stably
supply products as well as the business continuity management
to make it possible. This is one example of the Group’s focus onsustainability. Moreover, while previous Reports mainly focusedon environmental issues until last year, this year’s Report has
more emphasis on society and governance. Combined with thesection“Concept of CSR and Our Organization”which is also
structured based on an ESG framework, the Report can be further
characterized as a communication tool targeting ESG investors.
This is in line with the Group’s existing policies that have focusedahead to the uncertain future and pursuing a sustainable businessdirection the Report is taking, it naturally becomes clear what
will be expected of the next Report. First of all, I would like theGroup to explore the possibility of extending the timeframe.

When looking ahead to the future of the automotive industry, it

is absolutely necessary to address climate change. A number of

automotive manufacturers have already disclosed their analyses
on risks and opportunities with anticipation of long-term changes
in powertrains. Their goals are set for the year 2050, and 2030
is generally considered a milestone that connects the current
state and the goal. Since the Group’s main products are oil seals,
strategies adapting to medium- and long-term electrification,
especially in terms of opportunities, are the primary interest
among ESG investors when discussing the sustainability of theGroup’
s business model. I encourage the Group to enhance
information disclosure, including the scenario developed inaccordance with the TCFD framework. Moreover, as exemplified
by climate change, it is also effective to identify and disclose nonfinancial factors (materiality) that affect the Group’s sustainability
in the long term. In the process of identifying these factors, theGroup may incorporate not only its accumulated experiencein CSR management but also the learning from its initiatives for
digitalization (visualizing production), which is also emphasized in
the new Medium-Term Management Plan. I look forward to seeing
the further disclosure of non-financial information by the NOKGroup.

Keisuke Takegahara

on its social responsibility to multiple stakeholders. According to
the current logic of ESG investing, CSR is to synchronize solutions
to social issues with business growth. Therefore, the Group truly

Executive Officer
Deputy Chief Research Officer
Development Bank of Japan

Response to Third-Party Opinion

an unavoidable issue when looking ahead to the future of theautomotive industry. Just the other day, Prime Minister Yoshihide(On a parent basis for NOx and SOx)

Wastewater

NOK Group companies (on a parent basis for BOD)

Waste, etc.

NOK Group companies based in Japan

Environmentally hazardous substances

On a parent basis

FY 2019 PRTR Results

On a parent basis

Various costs

On a parent basis

Raw Materials

NOK Group

EnergyNOK Group

Water

NOK Group

Environmentally hazardous substances

On a parent basis

CO2 emissions

NOK GroupNOx

On a parent basis

SOx

On a parent basis

VOC emissions into the atmosphere

NOK Group

Drainage water

NOK Group companies (on a parent basis for BOD)

Industrial waste, etc.

NOK Group

Environmentally hazardous substances

On a parent basis

While NOK has steadily engaged in CSR activities for a longtime, it seems that the company has overlooked the importanceof“communicating”and“having stakeholders understand”thoseefforts. This year, based on this learning, we have developed theReport into one that will help readers understand more about
the CSR activities conducted by NOK. We deeply appreciate thepositive opinions by Mr. Takegahara on the improvement of the
CSR Report itself. Encouraged by his valuable comments, we aredetermined to continue our efforts to develop reader-friendly
reports.
For this edition, we have received advice on efforts to address
climate change. As noted in the comments, climate change is

Suga stated that Japan would aim to cut greenhouse gases to zeroon a net basis by 2050. Likewise, we need to move our activities
forward with goals that go beyond the SDGs. While reinforcing
the existing activities, we are committed to further enhancing thecontents of the Report so as to better communicate NOK’s efforts
to various stakeholders.

Noriyuki Takahashi
Senior Operating Officer
General Manager, Corporate Administration
Office and Corporate Risk Management Office

NOK CORPORATION CSR REPORT 202074