ENVIRONMENTALREPORT2018

Top Message
In recent years, the global society's trends in the environment havehighlighted a variety of environmental issues, including the resource depletion
associated with population growth and climate change due to global
warming, and it is becoming necessary to address these issues globally.
With special reference to the issue of global warming, it was decided to makeefforts to address global warming throughout the international community, in
the Paris Agreement, adopted by the 2015 United Nations Climate Change
Conference (COP21) with the purpose of protecting the current and futureclimate, with the target to hold the increase in global average temperature to
below 2°C above pre-industrial levels.
We believe that, as society becomes more conscious about the solution ofimportant environmental issues, global companies also are expected to takeproactive action to address these issues.
Under these circumstances, companies are playing an increasingly importantrole in solving environmental problems, and it is essential to respond to therequirements and needs of society. Thus, companies are no longer chosen by
the stakeholders with only pursuing profits.
It is necessary to drastically change our values, set targets for coexistencewith the earth and society, and take steady action to achieve them.
Nakanishi Inc. (hereinafter referred to "NSK") recognizes that the conservation of the global environment is one of theimportant issues common to humankind, and has been promoting environment-friendly company activities based on its
environmental policies of giving consideration to the global environment conservation at all stages of its businessactivities.
We consider environmental issues as one of the most important issues that companies should take on social
responsibilities.
Our most important mission is to reduce the environmental impact during manufacturing, as well as to create
environment-friendly products that can contribute to the environment.
With the aim of establishing a low-carbon society, a highly cyclical society, and a natural symbiosis society, we are
actively working together to achieve it as a manufacturing company. We provide new value to people's lives bydeveloping high-quality, high-value-added products and working on manufacturing environmental-friendly products.
In addition, environmental laws and regulations are becoming more stringent worldwide, and the environmental needsof our customers are also diversifying.
We recognize these trends as opportunities. We will take prompt action for providing products with higher
environmental performance as soon as possible to fulfill our responsibility as a manufacturing company.
Our goal is to create future of sustainable, safety, and rich global environment. To achieve this, we will improve thequality and technical capabilities of our all employees through provision of environment-friendly products and services
worldwide and contribute to the society through manufacturing.
NSK will continue to improve our work for business development, while succeeding people's environmental activities tothe next generation, to provide the best value to stakeholders.
Nakanishi Inc.
President and Group CEO

Eiichi Nakanishi
ENVIRONMENTAL REPORT 01

Environmental Policy
NSK shall implement in all its corporate activities, such as research and development,
manufacturing, sales and services of ultra-high-speed rotary equipment, including
dental instruments, considering the organization state that can affect businessactivities, the following environmental activities based on the goals of reduction ofenvironmental impact for the global environment of the future, harmony withnature, and the establishment of a healthy and prosperous society:1. Promotion of environmental protection, including preventionof contamination
NSK reduces environmentally hazardous substances in all of its activities toprevent contamination and protects the natural environment from harm anddegradation arising from organizational activities, products and services.

2. Continuous improvement of the environmental performance of energy
and resource conservation
NSK continuously improves its environmental performance in all fields of its
activities including manufacturing products, focusing on energy conservation
for global warming prevention and recycling for resource conservation.

3. Compliance with environmental laws, regulations
and other voluntary standards
NSK ensures compliance with environmental laws and regulations related to allof its corporate activities, products and services and standards judged to affectthe needs and expectations of interested parties.

4. Reduction of environmental loads in all processes of business considering
the life cycle
NSK strives to continuously improve the activities to reduce environmental
impact of all production processes from product planning and development tomanufacturing, sales, use and disposal, with all of its employees, by accurately
assessing the impact of its corporate activities on the environment and setting
environmental targets within the range of technological and economical abilities.

5. Promotion of communication with stakeholders
NSK communicates with stakeholders, including those in the surrounding areas,
to maintain the environment.

6. Dissemination of environmental policy
NSK communicates environmental policies and the importance of global
conservation to all related stakeholders.

ENVIRONMENTAL REPORT 02

Environmental Management System
Environmental issues are common to people all of
the world, and it has become an age that companies'
effort to reduce their environmental burden affect
the quality of its management and, in turn, theevaluation of its products.
In January 1999, we acquired ISO14001 certification,
the global standard environmental management
system, and have tackled an environment-friendly
business operation early on.
NSK implements in all its corporate activities, such as
research and development, manufacturing, sales andservices of ultra-high-speed rotary equipment,
including dental instruments, the environmental
activities based on the goals of reduction ofenvironmental impact for the global environment of

the future, harmony with nature, and the establishmentof a healthy and prosperous society.
We are working on a variety of environmental issues
at all stages of the product life cycle.
We operate the system under all organizational
activities, including development, manufacturing,sales, and management department, and we haveacquired ISO14001 certification through efficient
cooperation with each department.
In FY2017, we have completed the transition to
ISO14001:2015. We will continuously work proactively
to reduce the environmental impact with our all
employees, aiming at both environmental conservationand economic development.

Environmental Management System (EMS)
Internal
and external
problems

Scope: Headquarters, Tokyo Office, Osaka Office, and Chubu Sales Office
Applied to designing, manufacturing, sales, ancillary services and marketingof the following products:
1. Dental rotary cutting instruments and ultrasound Instrument
2. Dental laboratory rotation cutting instruments and ultrasonic instruments
3. Surgical rotation cutting instruments and ultrasonic instruments
4. Sterilization tools
5. Apex Locators
6. Industrial hand-held tools
7. Industrial spindles

P• Environmental aspects• Legal or other requirements• Objectives, targets and programs

PLAN

D

• Resources, roles, responsibility and authority• Competence, training and awareness• Communication• Emergency preparedness and response• Control of documents• Operation control• EMS documentation

DO

C

A

CHECK

• Monitoring and measurement• Evaluation of compliance• Nonconformity, corrective and preventive action• Control of records• Internal audits

ACTION• Management review

Intended results of the environmental management system (EMS)ENVIRONMENTAL REPORT 03

Needs
and expectationsof interested parties

Environmental Management Promotion Structure
NSK has established the management system
division as a major department in charge of
EMS/QMS management.
The management system division has a specialized
EMS organization which conducts important deliberationand decision-making, including determination ofenvironmental policies, setting environmental targets,and compliance with environmental laws andregulations.
We also have established three committees; theEnvironmental Committee which manages theoperation of an environmental management systemand deliberates documentation, the Pollution Prevention
Subcommittee which monitors requirements forchemical substances of each countries, such as
REACH Regulation and RoHS Directive and verifies
their impact on us, and the Energy and Resource
Saving Subcommittee which promotes energy
conservation and 3Rs (reuse, reduce, and recycle).
Each committee considers and discusses various
issues and develops activities throughout the company.

President

Environmental Policy

Annual Environmental
Targets
Environment Committee

Pollution Prevention
Subcommittee

Energy and Resource
Saving Subcommittee

Department in charge

All Departments• Management of chemical
substances• Green procurement• Response to chemical substanceregulations• Activities of relevant departments• Company-wide activities for energy
and resource conservation• Setting annual environmental targets
and implementation• Subcommittees meeting once amonth (members selected from all
departments)

ENVIRONMENTAL REPORT 04

Environmental Control Manager
Internal Auditor
EMS Office• Preparing environmental impact assessment• Environmental targets• Programs• EMS documents

Departmental
Subcommittee• Environmental activities of eachdepartment• Report to the Environmental
Committee

Environmental Audit
NSK conducts internal environmental audits once a
year to check for the conformity, legal complianceand effectiveness of the management system, as well
as for the promotion status against the medium-termtargets. This ensures that the management system isfunctioning effectively.
The results of this internal environmental audits arereported to the management level as input information

for the management review.
In addition, the purchasing department and production
control department lead environmental audits ofbusiness partners.
We recognize the environmental audits of business
partners as opportunities to share the current issues,and cooperate with each other to solve them.

Compliance with Environmental Laws and Regulations
As global warming, resource energy, and other global
environmental issues are becoming more widespreadand globalized, policies and regulations are being
reviewed and strengthened at the regional andnational levels with the aim of sustainable growth.
NSK has strengthened its compliance managementin accordance with environmental laws and regulations
in order to ensure compliance with environmental
laws and regulations at each production and salesorganization.
As the processing of parts was transferred to the A1
Factoty in FY2018, it was necessary to change specificfacilities under the Water Pollution Control Law andthe application for the installation of the hazardous

materials warehouse and facilities based on the Noise
Regulation Law/Vibration Regulation Law.
Regarding chemical substances, as phthalates havebecome subject to the revised EU RoHS Directive,
we have worked on replacing them with alternative
substances.
We have been monitoring information on revisions ofdomestic and overseas environmental laws andregulations in order to ensure compliance with them.
As a result, there were no breach of environmental
laws and regulations or other requirements in FY2018.
We remain committed to monitoring environmental
regulations and other requirements to ensurecompliance.

Major relevant environmental laws and regulations
Water quality

Safety & Facilities• Water Pollution Control Law• Septic Tank Law• Industrial Safety and Health Law• High Pressure Gas Safety Law• Fire Service Law

Global Environment• Energy Conservation Law• Act on Rational Use and Proper Management of Fluorocarbons

Noise and vibration• Noise Regulation Law• Vibration Regulation Law

Chemical substances• Chemical Substances Control Law• Poisonous and Deleterious Substances Control Law• PRTR Law• RoHS Directive• REACH Regulation

Waste & Recycling• Waste Management Law

NOTE) These are part of the environmental laws and regulations
surrounding NSK.
NOTE) NSK also complies with laws and regulations in various
countries and regions related to its business.

ENVIRONMENTAL REPORT 05

PRTR (Pollutant Release and Transfer Register) Substances
In FY2018, the handling amount of the PRTR regulated
substance became 2.4 tons a year. Therefore we
submitted a notification of the release amounts andtransfer amounts.
The handling amount of regulated substances in
FY2018 increased 37% compared to the previous year
due to operation of the new A1 Factoty, a specialized

Releaseplant for metal processing.
Approximately 86% of the handling amount is madeup by Abzol, which is used for cleaning parts. Abzol is
all reprocessed after use, so the transfer amount inaccordance with the PRTR Law is "zero".
From now on, we will consider substitution of PRTR
regulated substances to reduce its handling amount.

Intothe atmosphere

Transfer

Into outside
the workplace

To soilin the workplace

Into public water

To sewage

Landfill
at the workplace

Class I Designated Chemical Substances specified by PRTR Law

ReleaseamountItem

FY2018Emissions into the atmosphere

24.8

Item

FY2018Transfer to sewage

Release into public water

0.0

0.0

Transfer into outside the workplace

7.4

Release to soil
Landfill

0.0

Total Transfer Amount (kg)

7.4

0.0

Total Release Amount (kg)24.8

Release amount : Amount of substances included in exhaust gas andwastewater from production processes, etc.
Transfer amount : Amount of substances transferred by disposing ofwaste outside the workplace, etc.

Transferamount

ENVIRONMENTAL REPORT 06

Environmental Performance Report
1. Overall environmental impact of business activities
Our material balance is as follows:

Focused on reduction in use ofhazardous chemical substances
included in the products andmaterials.
Promoted energy saving
initiatives through raising
employees' environmental
awareness

Promotion of zero emission
Reduction of CO2 emissions andchemical substances

Development

CO2 emissions
CO2

Energy consumption
Electricity(kwh)

14,313,182

LPG
（m3）

9,824

Chemical Substances
Handling Amount
PRTR
Handling AmountRelease and transfer ofchemical substances
Procurement

Input

OutputManufacturing

Paper Purchase Amount
Purchase Amount(A4 size equivalent)

Release into
the atmosphere24.8 kg

Release into water

0.0 kgWaste emissions

7.4 kg* Amounts reported in 2018

2.4 ton* Amounts reported in 20180.1222 ton

3,818 tonAmount of waste
Emissions115.6 ton

Landfill

0.0 ton

Production and shipments
Distribution
Sales

ENVIRONMENTAL REPORT 07

Number of parts production(1,000 units)

53,171

Shipments

2,863,965

Environmental Performance Report
2. Activities for reduction of environmental impact
NSK carries out improvement activities under its
medium-term plan, "NSK Green Plan 2020". However,effective improvement of environmental issues
cannot be achieved with our activities only.
We believe that we are able to substantially contributeto the solution of environmental issues if we share our2016

Environmental issue
Chemical substance

Reduction of
CO2 emissions
Reduction of CO2
emissions from
non-production
activities

Establishmentof system,
enhancementof awareness

1% of reduction
per production
unit compared tothe previous year

beliefs and work together with stakeholders throughout
the supply chain, including suppliers who supply
parts and customers who receive products.
NSK works with stakeholders to help solve environmental
issues.

2017

2018

2019

2020

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

Reduction of CO2 emissions from non-production activities
Reflect the contribution amount of non-production activities into the CO2 reduction effects(1) Energy conservation of products (3) Energy conservation in offices(2) Energy conservation in logistics (4) Switching to higher efficiency facilities

Resource recycling

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

Promotion ofzero emission

Maintain the recycling rate of 99.7% or more
Disposal of confidential information (valuable materials) with large-scale shredder vehicle and walkthrough survey for waste

Compliance with the effluent standards of BOD (Biochemical Oxygen Demand), and setting voluntary standards* Shifting from reduction of use to maintenance of water quality of city water (cafeteria, main building and hand wash
stations) and groundwater (others)

Reduction of use due toresource depletion

1% of reduction
per production
unit compared tothe previous year

Control of Class I
Designated Chemical
Substances

Confirmation of handling, release and transfer amounts of Class I Designated Chemical Substances

Chemical substance Compliance

Compliance with theeffluent standards
(BOD)

Paper

Establishmentof system,
enhancementof awareness

Water

Amount of waste

Promotion ofgreen procurement

Audit
Measurement

Environmental
promotion

Establishmentof system

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

1% of reduction
per production
unit compared tothe previous year

Response to surveys of material composition on suppliers
Compliance with laws and regulations(compliance with green procurement guidelines)

100% compliance with environmental regulations and voluntary standards
Prior understanding of revised information on related laws and regulations

NSK Green Plan 2020
2020
Pollution prevention
Improvement of environmental performance
Compliance with environmental laws and regulations
Reduction of environmental impact considering LCA

2016
Improvement of brand value
Increase in production
Risk avoidanceBusiness
contribution

ENVIRONMENTAL REPORT 08

Environmental Performance Report2-1. Promotion of energy conservation
The total energy consumption in NSK has been
increasing since FY2011 in accordance with therecent increase in production.
The total energy consumption in FY2018 increased
by approximately 32% compared to the previous year.
We believe that this was caused by the operation of
the new processing plant (A1 Factoty) in theindustrial park in the vicinity. At the A1 Factoty, someof the production processes are operated for 24hours. There are 100 oil mist collecting machines
installed to always collect and process oil mist
scattered in the work spaces.
NSK has been actively investing in energy conservation.

We have begun energy-saving activities at on-sitethrough the proposal activities, for example,
installation of sunlight panels, introduction of thepower visualization system, and the reduction of air
conditioners used in the A1 Factoty by separatingproduct storage with partitions.
Our employees' have built a high level of environmental
awareness and always solved familiar problems
steadily through ISO14001 activities.
We will continue to monitor the latest energy
conservation technologies and actively promotesteady improvement activities.

■ Total energy amountElectric Power Usage(Headquater・A1 Factory)

Total energy amount

1,000 KWH

Energy per production unit
(m2 * 1,000 units/CO2)

16,00015,35810,0000.05

0.04050

14,00012,000m2 * 1,000 units/CO2

0.04

0.03591
0.03146
7,811

9,928
8,791

10,8470.02714

0.03

8,000

0.02

6,000
0.01162

4,000
0

2014

2015

2016

ENVIRONMENTAL REPORT 09

2017

2018

0.01

0

Environmental Performance Report
1) Installation of sunlight panels
We have 256 sunlight panels on the southern sidewall of NSK Wing G.
Annual power generation is approximately 33,000 kwh, equivalent to approximately 8 residential housing, and isused for lighting in Wing G.
2) Introduction of "Power Visualization System" to headquarters and A1 Factoty
We have installed power monitors at all our workplaces to monitor power consumption in real-time and it sends
an alarm before over-demand. We are constantly enhancing our employees' awareness of energy conservation.
3) Introduction of the automatic control system to the company's air conditioners in FY2015
We introduced the automatic control system for the air conditioners, which randomly stops operating for 3
minutes per 30 minutes. This have reduced power consumption of the air conditioner by 10%.
The temperature of the air conditioners is set to 28 °C in summer and 21 °C in winter.
4) Active introduction of hybrid vehicles
With a few exceptions, we have actively introduced hybrid vehicles with less environmental impact than gasoline
vehicles to our headquarters plants and each offices. As a result, CO2 emissions associated with driving havedecreased by 34% compared with 2.0 L gasoline vehicles.
5) Switching to new electric power
We switched to a new power system in response to the deregulation of electric power supply requirements.
In the past, we have had a significant impact on production due to the Great Kanto Earthquake and the FY2015
flood that attacked Kanuma City, Tochigi Prefecture.
Therefore, considers for productivity due to natural disasters have been carefully investigated (risk assessment of
power supply) before making a decision on switching.
6) Operation of R&D Center (environment-friendly building)
The R&D Center building, a new headquarters building that started operation in April 2017, is designed forenvironmental compatibility. It incorporates environment-friendly materials and structure of exterior walls andequipment such as lighting and air conditioners. We have also introduced a central monitoring system to checkeach management value remotely at all times.
Exterior wall materials
The exterior walls of buildings are covered with Σ-shaped aluminum panels called
the "environmental panels," which protects the structural trunk and exterior thermal
insulator.
The environmental panel functions as a sunlight control system and a naturalventilator, which improve the insulation performance, make the internal environment
more comfortable, and achieve high energy conservation.
Lighting
All buildings are equipped with LED lighting, partially with a human sense sensor,
which prevents forgetting to turn them off for energy conservation.

Planting
We have planted more than 300 of 10 different trees and seeds, including cherrytrees, zelcova trees and grasses, outside the building to develop rich green walkways
and gardens.
We also landscaped the prefectural land in front of the main gate by planting
ground-cover plants such as hedelas and other seeds. In addition, environmental
beautification activities such as regularly picking up garbage on the surrounding
roads are carried out.

ENVIRONMENTAL REPORT 10

Environmental Performance Report
Underfloor air conditioning by floor cooling/heating
In large spaces, such as entrances, showrooms and the Center Coat with a four-story
atrium, the floor cooling/heating system using abundant groundwater works withthe underfloor air conditioners to make residential spaces comfortable and achieve
high energy conservation.

7) Operation of the A1 Factoty
We create 85% of our precision parts in-house. In
March 2018, we began operation of the A1 Factoty,
in which a large number of processes that were
distributed across multiple buildings are integrated
into a single building. In the A1 Factoty, we haveintegrated a number of processes from machining
parts to finishing to build up an optimized production
line with fewer wastes and losses. This increases
production capacity and substantially improve
product quality and production efficiency.
Energy consumption is one of the environmental
impacts of the A1 Factoty. As 70% of total energy isconsumed in the A1 Factoty, we have been promoting

energy conservation initiatives, including the proper
operation of compressors, reduction of air consumption,and optimization of the collection ability of dust
collectors, together with the production engineering
department and the parts processing department.
In addition, the A1 Factoty provides employee-friendly
facilities by constantly collecting and processing oil
mists scattered in work spaces.
As a global company, we will continue to timely
provide innovative and impressive products throughour manufacturing activities, while considering local
environment and work environment.

ENVIRONMENTAL REPORT 11

Environmental Performance Report2-2. Waste reduction, recycle
3Rs (reduce, reuse, and recycle) are the most effective
way to reduce wastes. NSK is working to reduce
industrial waste and promote 3Rs with the aim ofachieving resource recycling and zero emissions.
In FY2018, total waste emissions were approximately
115.6 tons, of which approximately 93% were waste
plastic, waste oil, and sludge. The production unit,
which had been on a decreasing trend, increased
significantly to 2.175 kg/1,000 units in FY2018. Thiswas caused by the increase in the amount of waste
oil collected by floor clean machines used in the A1
Factoty, and it has been confirmed that the amountof waste indirectly involved in production is increasing
the production unit. Currently, the frequency andrange of floor cleaning are limited and improvements

are being made.
In addition, we are actively working on the rental ofwaste cloths and the recycling of cleaning liquid.
The Energy and Resource Saving Subcommittee
promotes 5S activities at waste storage areas. In
order to ensure thorough separation of waste within
our company, we have devised easy-to-see andeasy-to-understand identification methods and are
constantly examining the ease of use of waste storage
areas while incorporating the opinions of the users.
Based on our belief that "if it is disposed, it's a waste,
but if it is sorted, it is an effective resource,” we willcontinue to promote recycling while conserving
limited resources.

Changes in waste emissions and production units
kg

120,000

2.175

Waste emissionskg/ 1,000 units

2.200

Emissions(per production unit)

100,000

2.000

80,000

1.697

1.739

60,000

1.800

1.682

1.771

1.600

1.610

1.568

40,00020,000

1.400
1.290

0

2011

Waste item

Waste plastic(mixture)

1.200

2012

Intermediate
treatment

Compression
Shredding

2013

2014

2015

2016

Disassembly
Sorting

PC board

Crushing

Dismantling
waste

Smelting

1.000

2018

Recycling

Waste item

Intermediate
treatment

Recycling

Plastic
materials

Oiled waste

Incineration

Roadbedmaterials

Blast furnace
reducing agent

Fluorescent lamp

Roadbedmaterials

Chip of wood

Iron materials(valuables)

Recycling
Crushing

Waste liquid cans

Plastic
materials
PC and OA
equipment

2017

Indistinguishable

Iron products
Sorting
Melting

Metallic
material

Sorting
Incineration

Roadbedmaterials

Coppermaterials(valuables)

Rigid plastic

Incineration

Ceramics

Crushing

Extracted
metal(valuables)

Stain / Sludge

Incineration

Glass (clear)
Glass (colored)
Grindstone

ENVIRONMENTAL REPORT 12

Fuel chips

Crushing

Roadbedmaterials

Environmental Performance Report■ Environmental Activity Assessment for FY2018
PurposeObjective

Achievement Assessment

Reduction of CO2 emissions

63.7%

0.1222 ton-CO2 comparedwith the target of 0.0778 ton-CO2

100.0%

Stop 8 out of 21

Reduction of waste emissions(3 % reduction compared to 2015)71.8%

2.175 kg/1,000 units comparedto the target 1.562 kg/1,000 units

Regeneration of cleaning fluid (HC-250)
and introduction of recycled products

100.0%

Recycling of our waste liquid and reuseof regenerated cleaning fluid

100% switching to rental waste

100.0%

Elimination of disposable waste
and completion of switching to rental waste

Integration and compactnessof instruction manuals

100.0%

Annual effect: ¥510,000

Digitization of drawings

100.0%

Introduction of tablet terminals
to digitize processing drawings

Phthalic acid-free of industrial products

100.0%

Phthalic acid-free of industrial products

Environmental audits of business partners
10 suppliers, 4 contractors for processing

100.0%

Promotion of environmental activities
and confirmation of legal compliance（3 % reduction compared to 2015）
Energyconservation Optimization of the numberof compressors controlled

Resource
savingPollution
prevention

Status

Evaluation Criteria:= Achievement rate of 100%

= Achievement rate of 90% or more and less than 100%

= Achievement rate of less than 90%

The reason for the failure to achieve the targets for energy and waste is that a new plant has been in operation. Considering the working
environment and the health of employees, the amount of energy used is increasing in areas that are not directly involved in production.
Therefore, we will consider measures to reduce energy consumption in cooperation with the production department.

■ Water quality management of plant wastewater and domestic wastewater (BOD value)
Monitoring Items (Unit: mg/L)
Septic tank

2011

2012

2013

2014

2015

2016

2017

2018

Tertiary treatment tank BOD

20

9.0

9.4

7.1

9.7

4.6

5.4

3.4

3.2

30-person tank

20

7.4

7.7

6.6

10.0

11.3

10.5

12.1

4.5

5.8-8.6

7.5

7.5

7.6

7.3

7.6

7.5

7.6

7.7

50

3.8

4.1

1.1

7.2

8.9

16.6

11.3

4.0

25

2.5

3.0

1.8

2.3

3.0

2.1

3.0

3.6

5

0.6

0.5

0.5

0.5

0.7

0.6

1.1

0.7

BOD

Hydrogen ion concentration
Suspended solids SS

Plant
wastewater BOD

n-Hexane■ Promotion of the Ecocap Campaign (FY2018 results)• Collection results
Cumulative total: 308,181 caps → 56% (50,740 caps) over the previous year
• Vaccine
33 patients (860 with one polio vaccine) Cumulative total: 401.4 patients• CO2 reduction
207.9 kg (3.15 kg CO2/kg) Cumulative: 2,276.6 kg■ Other• Recycling rate of cutting oil: 99% or more
• Cleanup of the area around the plant• On-site verification of waste disposal contractors

ENVIRONMENTAL REPORT 13

Management of Chemical Substances in Products
In recent years, regulations on chemical substancesin products have become increasingly strict, including
the implementation of RoHS Directive, REACH
regulation, etc., and thorough control systems havebeen required.
Our basic philosophy is "not to enter," "not to use,"and "not to emit" of chemical substances subject toregulation, and we have established and areoperating the "NSK Green Procurement Guidelines."
Especially, in response to the REACH Regulation, weare promoting the procurement of materials that
SVHC (substances of high concern) are not used andwe quickly obtain information on newly added SVHC
twice a year and verify its impact on the parts andmaterials used.
According to the RoHS Directive, electrical andelectronic tools (Category 6) that are exempt fromthe application of phthalates will be applied in Julythis year, and medical devices (Category 8) will beapplied in July 2021. Electrical and electronic tools(Category 6) substitution has been completed.
When considering substitute materials and parts, we
thoroughly consider product quality and conduct
evaluations from the user's perspective and from allperspectives such as durability, safety, functionality,
and operability.
We recognize that establishing a system that does
not contain regulated substances in coordination
with the quality management system will enable us
to build trust with our users over a long period oftime. In addition, we regard such activities andattitudes as one of our responsibilities to achieve thebest exchange of value with our stakeholders, andwe believe that this is our responsibility.

Green Procurement
To realize environmentally friendly products, it isessential to cooperate with suppliers.
We have established the NSK Green Procurement
Guidelines in order to procure parts and materials
that do not contain regulated chemical substances
through environment-friendly manufacturing.
We are also asking suppliers to cooperate withenvironmental audits and surveys of chemical
substances contained in products throughout theyear in order to establish a chemical substancemanagement system in the supply chain, including
suppliers.
To investigate chemical substances contained in
products, we have introduced new chemSHERPA
tools and are striving to strengthen the regulatory ofchemical substances.
This is one of the efforts we aim for "not to enter,""not to use," and "not to emit".
The objective of this effort is to improve themanagement status of suppliers that are upstream
companies, and we believe that it also leads tobuilding trust with midstream and downstream
companies. We will continue to strengthen our green
procurement system by regularly and continuously

conducting audits and guidance for suppliers thatare upstream companies.
In addition, each internal organization prohibits theuse of hazardous chemical substances regulated ineach country in accordance with environmental laws
and regulations and internal regulations. As amember of the NSK Brand, it is always the mission of
manufacturing to improve customer satisfaction. We
are committed "not to use" hazardous chemical
substances while promoting the development ofhigh value products and efficient manufacturingfrom everyday life.
By thoroughly enhancing our efforts "not to enter"and "not to use,” we believe that the purpose that is"not to emit" hazardous chemical substances fromour company can be achieved.
We are committed to ensuring that cooperatingcompanies understand the purposes of "not to enter""not to use" and "not emit" by monitoring theconstantly changing information on environmental
laws and regulations of each country, and that ourcustomers can use our products without any
concern.

ENVIRONMENTAL REPORT 14

Activities to Preserve Biodiversity
NSK divided its activities to conserve biodiversity
into three fields; the raw material procurement,
products manufacturing, and industrial sites.
In the field of the raw material procurement, we
cooperate with suppliers to conduct the activities,
while deepening understanding of biodiversity. We
make particular efforts to prevent the inclusion of
hazardous substances based on green procurement,
to stop idling during delivery, and to reuse returnablecontainers and cushioning materials.
In the products manufacturing field, we focus on
reducing impact on the ecosystems throughmanufacturing, for example, reduction of energy andresources consumption, and the CO2 and wastewater
generation. We have been promoting sustainable
efforts, including BOD value control, use of sunlight

panels and introduction of high-efficiency equipment,
for the purpose of environmental conservation.
In the industrial sites, we give special consideration to
the local environment and the ecosystems around theplant through promoting social contribution activities
such as securing green spaces in the premises andbeautification activities around the plant.
Biodiversity provides essential benefits for all
humankind. In this context, biodiversity conservation
activities are spreading as global initiatives.
Although our activities are steady and modest, we
believe that they will become very meaningful if all
employees continue these small activities with theiringenuity. We will continue to build up such steadyand sustainable activities.

Education and Enlightenment
Raising environmental awareness of each employee
is important for promoting environment conservation
activities.Therefore, we believe that enhancement ofeducation system and continual education are
indispensable.
We regularly provide general environmental educationin order to improve our employees' knowledge of theenvironment. New and mid-career employees areencouraged to increase their knowledge of ourenvironmental policies, ISO14001 requirements, andenvironmental laws and regulations. We also provide

education to our business partners and related
departments on chemical substances related to the
EU RoHS Directive and REACH Regulation, and on
the details of revisions to environmental laws andregulations.
In addition, we give lectures on recent environmental
issues and our environmental activities to visitors forfactory tours at elementary schools, etc. We havebeen recognized as a manufacturing company thatgives due consideration for environment and operates
locally oriented business.

Communication with Local Communities
As a local company in Kanuma City, Tochigi Prefecture,
NSK focuses on communication with local communities,
including local government and residents, etc.
We are promoting the "Clean-up NSK" campaign, alocal cleaning activity, mainly undertaken by the
Energy and Resource Saving Subcommittee.
We work to beautify roads in the neighborhood usedby local residents and our employees everyday sothat they can be used safely and comfortably.
We have submitted the application for "AI-Road"(which means "Love-Road") to Tochigi Prefecture forthis cleaning activity, and we are committed tomaintaining and managing the environment aroundthe plant under our responsibility.
This effort has been highly appreciated by local
residents and customers who visited us.

www.nsk-inc.com
700 Shimohinata, Kanuma, Tochigi 322-8666, JapanENVIRONMENTAL REPORT 15