Sustainability report 2023

CONTENTS
Top Message.....................................................................................................................3
Company Profile
Company Profile......................................................................................................................6
Sustainability at NSK............................................................................................................ 13

SocialQuality, Customer Service and Product Responsibility............................................... 22
Employee Data...................................................................................................................... 28
Human Capital Development............................................................................................ 29
Diversity and Equal Opportunities.................................................................................... 32
Conducive Workplace Environments.............................................................................. 34
Occupational Safety and Health & Health Management............................................ 38
Respect for Human Rights................................................................................................. 46
Responsible Supply Chain.................................................................................................. 47
Relationships with the Local Community: Social Contribution Activities.............. 49

Environment
Environmental Management............................................................................................. 54
Controlling Climate Change.............................................................................................. 67
Effective Use of Resources................................................................................................ 84
Our Products and Environmental Activities................................................................... 90
Reducing Emissions of Hazardous Chemical Substances ........................................ 94
Management of Chemical Substances........................................................................... 98
Conserving Water Resources..........................................................................................102
Biodiversity Preservation..................................................................................................104
Supply Chain Environmental Initiatives.........................................................................108

GovernanceCorporate Governance......................................................................................................110
Compliance..........................................................................................................................114
Risk Management...............................................................................................................118
Tax Transparency................................................................................................................120
Interviews with Outside Directors.................................................................................121
GRI Standards Content Index..........................................................................................124

Editorial Policy

Significance of This Report
NSK has been issuing our Environmental Report since FY2013. Starting from FY2021, we will be
issuing our Sustainability Report which expands on the scope of reporting and introduces thesustainability initiatives of the NSK Group. Through this report, we aim to allow stakeholders to
widely understand our initiatives.

Scope of Report
In principle, this report covers NSK and its consolidated subsidiaries. In this report, “NSK” refers
to NAKANISHI INC. as an unconsolidated entity, while “NSK Group” refers to the overall NSK
Group in Japan and overseas. “NSK” can also refer to our brand name.
Period of Report
January 1, 2022 to December 31, 2022 (including 2023 for certain sections)Time of Issue
August 2023
Reference Guidelines
GRI Sustainability Reporting Standards

2Top Message
Through Unique and Innovative Grinding Technology
We Will Contribute toward Achieving a Better Society and People’s Happiness

C-P-S —NSK’s Management Policy
With its mission, “To create brilliant progress via innovative grinding technology,” NSK has developed core high-speed rotary,
ultrasound and micromotor technologies and created innovative products in the dental, surgical and industrial business fields.
We currently have business sites in 16 countries around the world and sell our products in more than 135 countries. In the conductof business, we have cherished the three concepts of “Culture oriented,” “People based” and “Social perspective” (C-P-S) as ourmanagement policy for many years. Through practicing management that respects local cultures, is based on people and has asocial perspective, we have earned the trust of stakeholders around the world.

Materiality for Sustainability
In recent years, various social issues such as climate change, human rights, and economic inequality have come to the forefront,
requiring response by not only society as a whole, but companies as well.
NSK implemented a review of our materiality to share again internally the initiatives carried out under C-P-S up to now and our
future direction as well as make an appropriate response toward requirements from stakeholders.

In “resolving social issues through providing innovative products,” we strive to develop innovative products that contribute to
the extension of health expectancy and factory automation for the rapidly aging societies that are progressing, particularly indeveloped countries, while working to enhance our market penetration so that even more customers can use our products.

In “providing peace of mind and safety to medical workers,” we havededicated ourselves to the thorough pursuit of quality while weactively spread information on our products through our website,
etc. to help our customers use their products safely and with peaceof mind. In addition, we will continue to enhance both the quality
and quantity of seminars and training opportunities directed toward
medical workers to ensure that our products are being used in thecorrect manner.

In “creating workplaces where diver se human resources cangrow,” we are addressing both our internal systems and training in
the realization of diversity and inclusion. In addition to continuing
to promote our conventional take on health and pro ductivit ymanagement, we will also increase investment in employee training
and provide active support for the acquisition of skills that fit thechanges of the times, striving to ensure that our employees can workwith motivation as they build long careers.

3In “promoting a responsible supply chain,” with consideration for social issues that require comprehensive resolution across theentire supply chain such as child labor and forced labor, we formulated our Business Partner CSR Guidelines in 2021 and request
all of our business partners to implement initiatives related to ESG. Such requests to business partners will be undertaken globally.

In “response to climate change and contribution to a recycling-oriented society,” we engaged in zero-CO2 monozukuri that sought
to switch 100% of the electricity used at our domestic production sites to renewable energy, and achieved carbon neutrality.
We will continue to promote environmental activities to realize a sustainable society by implementing measures such as using
renewable energy, reducing per unit energy use and reducing waste volumes based on our Green Plan 2030 medium-term plan
formulated in 2021.

VISION2030—Toward 2030
Moving toward 2030, NSK thinks that the social issue of super-aging should be handled in particular. The world is aging rapidly,and especially so in Japan, where it is predicted that people 65 years and older will exceed 31% of the population in 2030. There
are similar trends in other countries such as various European countries, China and South Korea. One of the most important issues
in a rapidly aging society is the extension of health expectancy, and NSK will contribute toward solving the two issues of dental
and physical health. Furthermore, super population aging is leading to a decline in the working population, which in turn createsa bottleneck in economic growth. We will help to address this issue by contributing toward factory automation. The extension ofhealth expectancy holds an important key to the aspects of improving quality of life (QOL) for elderly people and reducing medical
expenses which are prevalent in a rapidly aging society. Through our products, we have dedicated ourselves to contributing to thetwo issues of dental and physical health.
With regard to dental health in particular, in recent years it was discovered that periodontal disease not only contributes toincreased risk of subarachnoid hemorrhage and diabetes, but also to mental deterioration in the manifestation of dementia. Goingforward, we will continue to provide innovative products that draw a direct line to dental health through fully applying our uniquecapacity to develop technology for dental products that the company has been cultivating since its founding.
Furthermore, there is concern that the decline in the working population resulting from the super-aging population will have anegative impact on economic growth. We will help to address this issue through innovative products that contribute to factory
automation.

With our 100th anniversary coming in 2030, we will do our best to take an active approach in working toward VISION2030 and thefive key sustainability themes as we strive to achieve a better society and people’s happiness under our mission, “To create brilliant
progress via innovative grinding technology”

4Company Profile

Company Profile
Company Name

NAKANISHI INC.

FoundedFebruary, 1930

Established

January, 1951

Head Office

700 Shimohinata, Kanuma, Tochigi 322-8666, JapanPhone+81-289-64-3380

Web Sitehttps://www.en.nakanishi-inc.jp

Number of Employees

1,478 (as of December 31, 2022)

End of Fiscal Year

December 31

Capital Stock

867 million yen

Representative

President & Group CEO Eiichi Nakanishi

Stock Exchange Listings

Tokyo Stock Exchange, Standard

Company profile

Company Profile

6

Changes in Consolidated Sales & Operating income
486

Consolidated sales and operating income(¥100M)

500
448
400
319

318

343

365

354

Company profile

Financial Results

330

300

200
137
100

0

84

94

97

92

85

2016

2017

2018

2019

2020

96

2015

Consolidated sales

2021

153

2022

Consolidated operating income

Sales ratio by business domain (FY2022)

Surgical products
7%
Industrial products
9%

Dental products
84%

Sales ratio by region (FY2022)

Others
14%
Asia
14%
Japan
18%

Europe32%

North
America22%

7

Centered on high-speed rotary technology, NSK undertakes businesses in three domains: dental products, surgicalproducts and general industrial products.

Dental businessCompany profile

Business Domain

To achieve “dental health”, we will develop innovative products in the fields of restorative dentistry,
preventive

dentistry,

periodontics,

implantology,

oral surgery and mobile dental care using NSK’s “innovative grinding technology”, namely, high-speed
rotary technology and ultrasound technology. All theaforementioned are complemented by our growing
range of decontamination products. In each field, we
will produce equipment that will allow dentists anddental hygienists to carry out treatment more quickly,
efficiently and safely, equipment that will make itpossible to provide new types of treatment and beless stressful for patients.
Furthermore, we will also develop equipment used byveterinary surgeons for the treatment and healthcareof animals.

8Company profile

Surgical business

Due to the rapid aging of society, there will be a significant increase in surgery for brain disease (e.g. stroke,
subarachnoid hemorrhage), spinal disease (e.g. spinal
stenosis, intervertebral disk herniation), orthopedic
procedures (e.g. implant surgery of knees and hips),
as well as various types of endoscopic surgery. NSK’shigh-speed rotary and ultrasonic products will be
indispensable in these kinds of surgery. Nothing ismore important than safety and speed when considering cranial, spine, and orthopedic surgery. The
precision of surgery is linked to the burden reduction
on patients and the speed with which they can makea favorable recovery. For this purpose, NSK takes theinitiative to include the opinions of famous surgeons
around the world to create medical tools which are
truly easy to use.

9Company profile

Industrial businessAs more and more factories become automated or
unmanned, NSK’s high-speed high-precision spindles
will be used in machines and robots in automated production lines in a variety of industries. The usage forsuch equipment is becoming increasingly diversified,and expectations of the performance and conditions
are getting higher. However, NSK will develop products by taking these needs into account in advance.
Furthermore, Nakanishi’s high-speed micro grinder
is used for fine deburring of work that demands
precision and accuracy in the mold manufacturing,crafts, and jewelry industries, and is greatly valued asa high-end class product.

10The NSK Group has its own sales bases at 16 locations outside Japan, and its products are used in more than 135
countries around the world. We have achieved the number one share of the global market in the field of dental rotaryequipment. Even in countries where we do not have local subsidiaries, we are strengthening our partnerships withlocal sales agents to achieve meticulous responses to user needs.

LondonGothenburg

Moscow

OregonFrankfurt

Shanghai

ChicagoOber-Mörlen

Seoul

Company profile

NSK—Expanding Globally

Kanuma, Tokyo, Osaka, Sendai
Fukuoka, Nagoya, Hiroshima

Paris

Singapore

AucklandThieneDubai

SydneyJoinville, Sao Paulo

Madrid11

To achieve the mission of “To create brilliant progress via innovative grinding technology,” NSK has continued to hone
the three core technologies of high-speed rotary technology, ultrasound technology and micromotor technology.
Using these core technologies, we will continue to provide innovative products in the dental, medical and industrial
fields, and keep contributing toward the creation of all kinds of progress, such as bringing inspiration, happiness,benefits and joy to society and people.

Company profile

NSK’s Core Technologies

High-speed Rotary Technology
Our dental drill (handpiece)—which we have continued to make since ourfounding—rotates at an extremely high speed of 400,000 revolutions per
minute. The ball bearings inside the handpiece significantly reduce friction
between parts to achieve high-speed rotation. At least 90% of the parts,
including the ball bearings which require processing precision at the submicron*1 level, are produced in-house. This high rate of in-house production
significantly contributes toward improving our product’s quality and costcompetitiveness.
*1: 0.0001 mm

Ultrasound Technology
Ultrasound is sound waves with high frequencies that cannot be heard by
our ears. Ultrasound vibrate at least 20,000 times per second, and the power(amplitude) of this vibration is applied as grinding power. Examples of ultrasonic equipment being used in the field of dental include ultrasonic scalers
and ultrasonic bone cutting equipment. The three parts, the tip, handpiece(vibrating part) and control engine, work together to enhance performance.
We brought our ultrasound technology in-house and have succeeded inraising power factor—which is usually around 0.6—to a level close to 1.
Micromotor Technology
Using electronic drive circuits, which we have developed over many years,
we achieve stable torque*2 and smoothness over a wide range of rotation
speeds, from ultra-low to ultra-high speeds. Our micromotors—which
achieve precise rotation control and manifest powerful and stable torque—
are used in equipment for implantology in the dental field. They are also usedin the field of industrial engineering in products such as robot arms and motor spindles which are used in combination with various types of industrial
machines.
*2: This is the force of rotation centered on an axis, expressed by force multiplied bydistance. It refers to rotational force.

12

NSK’s Corporate Philosophy and Sustainability
In line with the Group’s values, “Our Core,” NSK holds to the mission of creating “brilliant progress” via innovative

Company profile

Sustainability at NSK“grinding technology.” By creating new technologies, we strive to contribute to the development of medical care andto the enrichment of people’s lives. Amid the global trend of super-aging, extending health expectancy has become
a common issue for humankind. We believe that one of the solutions to extending health expectancy is dental healthand physical health. In addition, we also see factory automation as a solution to a decline in the workforce which is
attributable to the super-aging of society. Through our business activities, we will provide solutions for these social
issues, and we will help to realize a sustainable society.

Corporate
Philosophy[ Mission ]VisionVISION2030

Business Plan

CSR

Medium-Term Management Plan
NV2025+Materiality

Business Activities[ Style ][ Our Motto ]Annual President’s Policy
Department Action Plans
Daily Business Activities

Social issues and demands

13

Company profile

Corporate Philosophy

MissionStyle

Our Motto

To create “brilliant ogress” via• Exciting • Quality

Let’s increase individual value

innovative “grinding technology”• Open • Honest (EQOH)“Let’s fly” “Let’s add”

Our Core represents the corporate philosophy at NSK.
Our Core broadly identifies the thoughts and ideal manner of acting/existing that NSK should value in terms of thecompany as a whole, its various activities, and each and every member. Positioning Our Core at the nucleus, we strive
to be a company with an elevated social value.
Here is an introduction to some aspects of Our Core:

Brilliant progress
It is wonderful that the society in which we live is able to achieve more favorable progress. We at NSK feel “To create
brilliant progress” is our raison d’etre - Our mission - throughout all of our corporate endeavors. The simple word
“brilliant” is infused with many meanings for us, such as “complete/amazing solution,” “what people and society
truly pursue,” “dramatic change in style,” and even concepts of “admirable.” The word comes with the connotationof socially ideal progress. Creation of such “brilliant” value via our “innovative grinding technology,” in which we takepride, allows us as a company to help the steady development of our customers and society in terms of deep emotion,pleasure, comfort, and convenience.

EQOH
EQOH is our original acronym that uses the first letters from the four types of style upon which we place importance inthe conduct and activities we engage under the NSK name. The first letter, E, was taken from “Exciting.” It represents
a feeling of being excited about new challenges and creation. Q was taken from “Quality,” and it represents the pursuitof high quality. O was taken from “Open,” representing an openness toward society. And, the H was taken from “Honest,” imparting the meaning of sincerity and righteousness. We refer to these four styles, EQOH, as the way of NSK.

Fly & Add
Fly & Add represents the behavioral guidelines for each of us at NSK. The members of NSK engage in their jobs every
day, all the while placing great importance on Fly & Add. The meaning of Fly, you know. In this case, it implies unreservedly taking on any challenge to move forward in any job or task. The meaning of Add, you also know. In this case, it
implies the adding of one’s own additional value in the form of commitment and stance to one’s job.
A company is a collection of people, and it is the overall strength of those at NSK that represents the source of its
strength. NSK is a gathering of people who display their abilities to their heart’s content.

14

Company profile

Vision and Keyword for Business Development
VISION2030

NSK’s long-term vision for 2030

VISION2030
To be The Leading Excellent Global Medical Device Company

In the global dental and surgical markets, we will
become the only manufacturer capable ofmaking a significant contribution to extending
the health expectancy of people all over theworld by creating a steady stream of innovative
products the world has never seen.
MISSIONKEYWORDTo create brilliant progress via
innovative grinding technology

Super-aging society

Keyword for business development toward 2030
NSK believes that one of the keywords for business development in the decade leading up to its 100th anniversary is“super-aging.” The percentage of Japan’s population aged 65 and over is currently more than 28%, and is predicted
to exceed 31% in 2030. This trend of rapid population ageing is progressing rapidly not only in Japan but also in large
parts of the world such as Europe, China and Korea. In the rapid ageing society, the most important challenge is “theextension of health expectancy”, and the solution lies in (i)“dental health” and (ii)“physical health” . Furthermore, super
population ageing is leading to “a decline in the workforce”, which in turn creates a bottleneck in economic growth,and the solution lies in (iii) “factory automation”.
To address these three major social needs, we will create innovative new products and services and make a big social
contribution in three business domains (dental, surgical and industrial) using NSK’s “innovative grinding technology.”
Super-aging society

Prolongation of health expectancy

Decline in the workforce

Dental health

Physical health

Factory automation

DentalSurgicalIndustrial

Innovative “grinding technology”>Related Link:
Mid Term Management Plan Rolling Plan “NV2025+”15

In addition to striving to maximize its business value in the dental, surgical and industrial business fields by utilizing theinnovative grinding technology that it has been honing since its founding, NSK is also committed to creating social value and environmental value. The Sustainable Development Goals (SDGs) were unanimously adopted at the UN summit
in 2015. The aim is to achieve the 17 goals listed as SDGs by 2030, the same year as our 100th anniversary. In the leadup
to 2030, we will continue to advance our business based on both a business plan and materiality for sustainability.

Company profile

Materiality

Process for Identifying Materiality
In selecting our materiality, we identified the issues to be addressed by first understanding the relevance of the SDGs
to our products and services and to our business activities generating them, and by considering priorities with reference to relevant guidelines and ESG evaluation indices, such as the GRI Standards, ISO26000 and the FTSE4Good
Index.

STEP1

Understand the relevance of the SDGs to our products and services and to ourbusiness activities generating them

STEP2Consider priorities based on the GRI Standards, ISO 26000, the FTSE4Good Index, etc.

STEP3

Our Sustainability Promotion Team identifies candidate materiality

STEP4

Reconsider candidate materiality based on business value, social value and environmental value

STEP5

Board of Directors discusses and decides on materiality for sustainability

16

NSK reviews materiality for sustainability as appropriate based on changes in the social climate and the opinions
and requests of stakeholders. We are currently in the fortunate situation of expanding our scale of business, and our
products are being utilized in a wide selection of industries and businesses such as the medical and general industrial
fields. We are well aware of our responsibility to society and the significance of our role within it. As such, we haveconducted a review of our materiality for sustainability with the goal of securing our commitment to deliver innovative

Company profile

Materiality for Sustainability Promoted by NSK

products that contribute to people’s happiness and offer greater peace of mind and safety than ever before.

Materiality

Relevant SDGs

1. Resolve social issues through providing innovative
products
Release innovative products and enhance market penetration

2. Provide peace of mind and safety to medical workers

Socialvalue

Thorough pursuit of quality, provide lectures for medical workers
and ensure information provision/disclosure

Businessvalue

3. Create workplaces where diverse human resources cangrow
Diversity and inclusion, educational investment in employees,
provide motivation to work

4. Promote a responsible supply chain
Respect for human rights, observation of compliance and corporate
ethics

5. Response to climate change and contribution to a
recycling-oriented society
Reduce environmental impact throughout the entire productlifecycle

Environmental
value

17

Company profile

Contributions to SDGs
Resolve social issues through providing innovative products~Release innovative products and enhance market penetration~
Launching new products that contribute to reducing burden on patients

In May 2023, we newly released the most powerful dental handpiece that
NSK has ever produced—the Ti-MaxZ990/Z890. The addition of a new
proprietary system developed using the latest fluid simulation software provides a significant increase in power from conventional models and enables

T-Max Z990/Z890

smooth cutting to remove extremely hard prosthetic materials (surgicalartifacts) such as zirconia. This improvement also resulted in a decrease in
cutting times of approximately 30% in comparison to conventional models
and enables the minimization of patient discomfort. On top of that, a newmechanism has been added to the part of the handpiece that holds the bur(cutting tool) at the tip, providing more sustained gripping force compared
to conventional models and reducing the risk of the bur slipping or dislodging during treatment. Going forward, we will continue to contribute to thefurther advance of dental medicine by developing and providing innovativeand safe products such as these.
Launching new products that contribute to factory automation

The motor spindles which are managed in our industrial business are usedin lathes, machining centers, robots, and specialized processing equipment installed in the factories of corporate customer, and can be found ina wide range of utilizations which include drilling holes, cutting with end
mills, grinding with grindstones, and deburring with carbide cutters or wirebrushes. In May 2023, we newly released a motor spindle that saves labor

NR50-6000ATC-RS

by automatically changing tools—the NR50-6000ATC-RS. We were able tosignificantly reduce manual setup work by providing the ability to automatically change the multiple types of tools that are required in processing operations. In addition, processing times are reduced as a result of increasing
the rotational speed from 50,000 RPM in the previous model to the current
speed of 60,000 RPM. In seeking to help address the issue of the decline in
the working population, we will continue to provide innovative products that
contribute to factory automation going forward.

18

~Thorough pursuit of quality, provide lectures for medical workers and ensure information provision/disclosure~Thorough pursuit of quality in R&D

At NSK, we conduct various simulations and tests from the initial stages of
R&D as we undertake development of medical devices that is not just inno-

Company profile

Provide peace of mind and safety to medical workers

vative, but also takes safety into serious consideration. For example, the introduction and utilization of state-of-the-art analytical software has proved
beneficial to improving quality, reducing risks, and shortening development
times. In the medical industry, malfunctioning equipment could potentiallyresult in a life or death situation. As such, we run a series of tests to confirm
that electromagnetic waves emitted by our products do not affect otherAnechoic chambers in the R&D Division

devices and operate in a safe manner. In order to ensure that this process is
prompt and accurate, we have installed our own anechoic chamber withincompany premises. We maintain various other test equipment to guarantee
the safety and durability of our products, and are dedicated to delivering
only those products that have passed a strict testing process.
Symposium held at NSK’s Headquarters Center Court

NSK Symposium 2022 was held for a congregation of dentists and dental
hygienists in Tochigi Prefecture under the theme of “100 Years of Life: How
Dental Professionals are Facing Rapidly Aging Societies in the Modern Era.”
Three presenters active in various fields were invited to give lectures andconduct symposium discussions on topics including “The Role of Dental
Medicine in Supporting a Rapidly Aging Society,” “How Can Dentistry Help
Prevent Physical Decline and Oral Frailty*?” and “The Power of Dental Medicine in End-of-life Care.” The event was considered a valuable experience,as participants expressed their appreciation for new insights that could beapplied in medical practice settings such as the concept of respecting thelifestyles and happiness of patients in end-of-life care, paying attention tochanges in elderly patients during treatment, and the importance of detecting oral frailty at early stages.
*Oral frailty: An indication of physical decline (frailty); refers to the decline of oral functions such as mastication. swallowing andspeech.

Create workplaces where diverse human resources can grow
~Diversity and inclusion, educational investment in employees,
provide motivation to work~
Awarded the JEED President’s Effort Award for Excellence in Employing Persons with Disabilities

In recognition of NSK’s efforts to employ and establish a workplace for
persons with disabilities, we received the 2022 Effort Award for Excellencein Employing Persons with Disabilities from the President of Japan Organization for Employment of the Elderly, Persons with Disabilities and Job
Seekers (JEED). We have more than 1,500 employees in Japan and overseas.
We aim to create a work environment in which each and every employee canwork happily and actively regardless of nationality, gender, or disability. In
our efforts to employ persons with disabilities, we will continue to enhancevarious support programs to improve and establish appropriate workplaceenvironments.

19

Awarded as an Outstanding Company in the Award for Corporate Excellence in the Promotion of Healthy Smiles
Company profile

In May 2023, NSK received an “Outstanding Company Award” from the Japan Dental Association’s Award for Corporate Excellence in the Promotionof Healthy Smiles. This award recognizes the company’s enhanced selection of activities for promoting “healthy mouths,” including dental healthexaminations for employees, training on dental and physical health, and theprovision of an oral maintenance expense subsidy program. We hold to our
mission of creating “brilliant progress” via innovative “grinding technology”
and will continue in striving to enhance contributions to healthy mouths forpeople all over the world.
Opened ASK* learning center for training next generation of technicians
NSK has worked to manufacture high-quality products using our own
unique precision processing technology and state-of-the-art production facilities. In order to continue to pass down the wealth of precision processing
technology that we have developed over the many years since our founding,we have set up the ASK learning center within the A1+ Factory, which wascompleted in 2022, for training monozukuri human resources. The learning
center features lecture rooms for hosting classes and machines dedicatedfor use in practical training, establishing an environment for training practicalskills on a daily basis. In the past, the acquisition of technical skills in cutting
and polishing metallic materials required many years of experience in the industry. However, by providing intensive
training in both theoretical and practical stages with strict commitments to the skills and proficiencies of experts inthe field, we have been able to develop junior employees into highly skilled technicians in less time than ever before.
* ASK: Academy of “Sessaku” (cutting) & “Kenma” (polishing)Response to climate change and contribution to a recycling-oriented society~Reduce environmental impact throughout the entire product lifecycle~
Carbon neutrality achieved at Headquarters Factory and A1 Factory
Since acquiring ISO14001, an international standard for environmental management systems, in 1999, NSK has maintained a commitment to fostering the belief that companies are dutybound to fulfill their responsibility to society andhas thereby continued to promote initiatives to realize a sustainable society. Under these circumstances, from 2021,
we began introducing initiatives toward achieving zero-CO2 monozukuri by switching 100% of the electricity used
at our Headquarters and A1 Factories to renewable energy generated from solar and wind power (green energy). We
continued to accumulate initiatives to reduce greenhouse gas emissions, including installing solar panels at the new
A1+ Factory, updating aging equipment, and expanding the scope of application for eco-friendly product packaging.
Furthermore, in 2022, we successfully offset greenhouse gas emissions by utilizing carbon credits created under the
J-Credit Scheme and achieved carbon neutrality under the GHG Protocol Scope1 and 2 at our Headquarters and A1
Factories. In addition, we acquired third-party assurance confirming the validity of our calculation of greenhouse gas
in accordance with the GHG Protocol and that our company conformed with international standards based on specifications for the demonstration of carbon neutrality (PAS 2060) established by the British Standards Institution (BSI).

Head office factory(From right) A1 Factory, A1+ Factory

Third Party Assurance Report (PAS2060)

20

SocialQuality, Customer Service and Product Responsibility
Quality Policy
The products and services that are provided by NSK places top priority on conforming to the requirements of relevantlaws and regulations as well as customer requirements. We have established our quality policy based on the approachof undertaking quality management with all divisions to meet the satisfaction and trust of customers. Under this policy, we conduct quality management—which includes safety—in the entire product lifecycle, from planning, productdevelopment, manufacturing, sales and servicing to disposal.
Once each year, we analyze the state of our organization based on internal and external issues and the needs andexpectations of stakeholders to identify initiatives for risks and opportunities.
initiatives for identified risks and opportunities. These targets are then developed into departmental targets and activities toward achieving quality targets are undertaken by all employees.

Social

We formulate quality targets for the fiscal year based on our quality policy, the President’s annual direction and the

Quality Policy• Nakanishi achieves customer satisfaction and trust by quality management with all Nakanishi
staff members, based on the phylosophy of “quality first”.
• Nakanishi maintains effectiveness of the quality management system by meeting the quality
management requirements.

22Quality Management Structure
NSK strives to maintain and improve its quality management system structure based on the quality management system standard of ISO9001 and ISO13485 as well as the pharmaceutical regulations of market countries, such as Japan’s
Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices (PMD Act).
Additionally, all production facilities at the NSK Group have acquired ISO9001 or ISO13485 certifications. In addition,
besides ISO9001 and ISO13485 certifications, we obtained MDSAP*1 certification in 2019. We are working on further
solidifying legal compliance in our sale of medical devices to various countries such as the transition to Medical Device
Regulation (MDR*2).
Our quality management structure comprises is organized into the Quality & Regulatory Affairs Division, comprisedof the Quality Department which is in charge of managing product shipment to markets and managing safety after
manufacturing and sale; the Regulatory Affairs Department which is in charge of applications based on the pharmaceutical regulations of each country; and the Quality Pharmaceutical Affairs Department, which houses the QMS
Section, that implements and maintains the quality management system. The Quality & Regulatory Affairs Division, is
as the executive-in-charge. In our PDCA cycle, executives and employees including the President & Group CEO, theSocialin charge of companywide quality assurance and legal compliance, and is managed with the representative directors
three persons designated by Japan’s PMD Act (Marketing Director of Medical Devices, Domestic Quality Assurance
Administrator and Safety Control Manager) and General Managers attend the monthly QMS review meetings andannual management reviews. At these meetings, we work on improving quality by monitoring the progress of plans
related to quality, sharing information, and addressing and solving issues.
The company has confirmed that all of its critical suppliers have acquired ISO13485 certification. Additionally, thecompany has deepened cooperation with critical suppliers through measures such as implementing MDR training,
creating a structure to improve quality over the entire supply chain.
*1: MDSAP(Medical Device Single Audit Program)A program that confirms the compliance and appropriateness of a manufacturer’s QMS against
the requirements of regulatory authorities of Australia, Brazil, Canada, Japan and the United States through a single audit by an auditing agency*2: MDR(Medical Device Regulation)
Regulations that took effect from May 26, 2020, in Europe to replace the Medical Device Directive (MDD) regarding medical devices
that are used in the region.

President & Group CEO(Management supervisor)

Annual management review
Monthly QMS review meeting

Marketing Director of Medical Devices

Domestic Quality Assurance Administrator

Divisions

Sales Division
R&D Division
Manufacturing Division

Safety Control Manager

Management Representative

Internal Audit Team

Quality & Regulatoru Affairs Division
Service Division
Administration Division23

Initiatives
Quality in Design
In the design and development stages of products, NSK always strives to meet the laws, regulations and standardsof countries around the world while maintaining and improving product quality. In the lifecycle process of products,
eight “quality gates” have been established to confirm quality.
In addition, during the design and development stages for new products and at all times collecting information aboutcomplaints and safety for existing product designs, we conduct risk assessment regarding quality and safety andstrive to lower events with high risks.
We put efforts into quality evaluation during the development stage, which is the source of monozukuri (manufacturing), and establish environments allowing the conduct of EMC, product safety tests, useability evaluation, mechanicaland environmental tests, material analysis, electronic component analysis and fault analysis within the company toensure product safety and quality. At NSK, various testing is done for all new products based on relevant regulations,

Initiatives to Improve Product Quality and Safety

Socialsecuring safety and quality for products brought to market only after tests have been passed.

At NSK, the manufacturing frontlines have in place structures to ensure quality. The occurrences of nonconformancein the manufacturing process and at suppliers are monitored monthly and suppliers with high nonconformance rates
are instructed, as appropriate, to improve quality. At the same time, quality audits are conducted regularly.

Quality Education for Employees
NSK conducts internal education regarding quality policy, quality targets and the impact on the quality management
systems of each operation for all employees. Specifically, skill maps that organize requisite operational knowledge andskills for each department are maintained, identifying areas in which particular employees are lacking skills.
Based on the above, education is conducted by department and grade on the relevant standards of quality management systems such as ISO9001 and ISO13485 as well as the requirements of law and regulations. Education essential
for the maintenance of quality management systems is also conducted, including risk management workshops andinternal quality auditor workshops. In addition, quality education also includes workshops by external agencies, internal seminars with invited external lecturers and internal workshops by employees who are experts in their respective
operations.
Recently, internal education is being actively conducted online due to the impact of COVID-19, improving efficiency
by conducting workshops without the need for lecturers to travel from afar.

Quality Issues and Responses
NSK has introduced a complaint processing system to collect information about quality from markets around theworld in a timely manner. When information about nonconformance is obtained, we immediately pursue the cause toprevent nonconforming products from entering the market.
In addition, when corrective or preventive measures are necessary for the nonconformance which occurred, we
promptly follow internal regulations to plan and confirm these measures for their effectiveness. Through these actions, we strive to prevent the occurrence of similar nonconformances.

24

Customer Service Structure
At the NSK Group, more than 6,000 cases of customer feedback are collected and analyzed by department throughthe Customer Service Helpdesk as well as surveys by the Sales Division and external agencies. Reports to the management and verifications are conducted regularly, and the information collected is fed back internally for use in productdevelopment and quality improvement.

Customerfeedback

Surveys by Sales Division and external agencies
Customer Service Helpdesk

Customers
Agents in Japan

Customer Service
Department

Overseas agents

Overseassubsidiaries

Receipt of
repair request

Feedback
within NSK

SocialRepair Service
The NSK Group has established a sales network spanning 135 countries in the world. To allow customers to use products with peace of mind, we accept repairs ourselves within Japan’s domestic market while 15 local subsidiaries andapproximately 450 local agents do so for overseas markets.
Across the Group, we are working to enhance our structure for accepting repairs at local subsidiaries and local agents.
We have approximately 120 service staff at our headquarters and local subsidiaries.
Technicians who carry out repairs on our products undergo training either at our headquarters or overseas subsidiaries. We have established a system that evaluates the skills and knowledge developed through work and training andcertifies technicians who meet a certain standard.
Training Structure

Training by trainer from headquarters

The local subsidiary in Shanghai held training for repair specialists from 13 companies from agents all across China.
Participants worked to master repair techniques for the company’s products through lectures on product and maintenance knowledge and by repair lessons using actual products and parts. Through holding such events on a regularbasis, we will increase the number of skilled repair technicians and advance the creation of a repair service network
across China.

25

Responsible Marketing
NSK undertakes fair and responsible marketing activities in accordance with the Code of Ethics, Charter of Business
Behavior, Promotion Code of the Medical Devices Industry, and Fair Competition Agreement formulated by the Japan Federation of Medical Devices Associations (JFMDA). The JFMDA has the vision of “Quickly providing the latest
medical technologies to medical professionals and patients,” “Securing further safety for medical devices,” and“Strengthening global competitiveness by promoting development of new medical devices and technologies,” withthe objective of improving citizen welfare and contributing to the development of the medical device industry, andthe company participates in its activities as a member. We internally define the Compliance Behavioral Guidelines,
specifying fair sales activities within its framework. A compliance newsletter is also published monthly in an effort toincrease compliance knowledge and awareness.
NSK America Corporation, our subsidiary in the United States, undertakes fair and responsible marketing activities inaccordance with the Physician Payments Sunshine Act.

The Japan Federation of Medical Devices Associations• The Code of Ethics

Social>Related Link:• The Charter of Business Behavior• The Promotion Code Of the Medical Device Industry• The Fair Competition Code of the Medical Devices Industry in Japan• Transparency Guidelines for the Medical Device Industry and its Relationships with Medical Institutions and Other Organizations

Lectures and Provision/Release of Information to Medical Professionals
NSK conducts awareness-raising activities on the proper use of our products through practical seminars and lectures
to help our customers understand how to use their medical devices safely and effectively. In the dental business,
we held numerous seminars covering a wide range of topics including oral hygiene, restorative dentistry, dental oral
surgery, and geriatric dentistry. In addition, in the surgical business, we conducted training on the Primado2 product,
which is mainly used in bone cutting and other procedures in the fields of neurosurgery and orthopedics. We offer
online seminars in concert with seminars held onsite, providing optimal programs to meet a variety of needs.
Held numerous seminars in Japan and overseas regarding dental medicine
With a focus on preventative dental care to maintain dental health, NSK periodically holds practical training seminars
for implant care and mobile care. In 2022, NSK held 77 in-person on-site seminars and 51 private online seminars thatwere open to group attendance by dentists and dental hygienists at dental clinics. Additionally, there are currently 15
video seminars provided as content available only to NSK Academy members.

26

Held seminars, explanatory meetings, and training sessions for dental practitioners around the world
Overseas as well, local subsidiaries not only held periodic seminars using real-world equipment, but also held seminars
and training sessions covering various fields in cooperation with medical institutions in differing regions.
Malaysia

Australia

Handpiece maintenance seminar
Held an explanatory meeting to heighten productand maintenance knowledge to enable the use of
the company’s products safely for the long term.

Malaysian Government Hospitals
Held explanatory meetings at government
hospitals across the country, providing insighton topics such as handpiece maintenance andcautions for use.

Wangaratta
Government-affiliated regional medical facilities
Handpiece usage training
Under the slogan of “Learning methods tomaximize use of equipment from the people
who made it,” NSK held various educationalsessions at venues such as exhibitions, academic
conferences, and medical institutions.

United Arab Emirates

FranceIndia

Dubai CAPP Training InstituteSupported holding seminars using NSK products,
led by dentists and covering methods to safely
operate on low-intrusion wisdom tooth removal.

Paris Nice
Practical training by dentists
Held lectures regarding types of dental surgery
required according to the status of the bone into
which implants will be attached.

Bangalore Dayanand Sagar University
Held maintenance and product seminars for
professors, students, and assistants at dental
university.

SocialIndonesia

Supported product use training in the surgical business.
In the surgical business, we held product exhibitions and provided opportunities for hands-on training, etc., at academic conferences for neurosurgery,spinal surgery, and endoscopic spinal surgery regarding the Primado2 product, which is mainly used in bone cutting and other procedures in the fieldsof neurosurgery and orthopedics.
Endoscopic surgery using the company’s drills requires only small incisions
and is a low-invasion surgery that places lower burdens on patients, and NSK
provided opportunities for training to the doctors who will serve on the front
lines to spread the benefits of our products.

Thailand Chulalongkorn University
Hands-on course for endoscopic spine
surgeries

27

Employee Data
Number of Employees

As of December 31 in each FY

FY2018NAKANISHI INC.

FY2019FY2020

FY2021

FY2022

1,073

1,114

1,134

1,160

1,246

1

806

850

869

906

1,004

Temporary employees*2

267

264

265

254

244

277

309

315

333

474

277

309

315

333

474

Regular employees*

Overseas group companies
Regular employees*1

—

—

—

—

1,423

1,449

1,493

1,720

Regular employees*1

1,083

1,159

1,184

1,239

1,478

Temporary employees*2

267

264

265

254

242

NSK Group (global)*1: Excluding employees seconded to other companies *2: Part-time and contract workers

Number of Employees by Gender

As of December 31 in each FY

FY2018NAKANISHI INC.

Social—1,350

Temporary employees*

2

FY2019FY2020

FY2021

FY2022

1,073

1,114

1,134

1,160

1,246

Male

660

672

683

694

763

Female

413

442

451

466

483

Note: Scope of aggregation covers regular and temporary employees of NAKANISHI INC.

Number of Employees by Region

As of December 31 in each FY

FY2018FY2019FY2020

FY2021

FY2022NSK Group (global)

1,350

1,423

1,449

1,493

1,720

Japan

1,073

1,114

1,134

1,160

1,246

Europe

160

184

189

183

317

United States

62

67

68

73

80

Asia (excluding Japan) and others

55

58

58

77

77

Number of New Employees
FY2018NAKANISHI INC.

FY2019FY2020

FY2021

FY2022

136

131

76

109

160

Male

76

79

43

65

101

Female

60

52

33

44

59

Note: Scope of aggregation covers regular and temporary employees of NAKANISHI INC.

State of Employee Retention
FY2018FY2019FY2020

FY2021

FY2022

Resignation rate

5.99%

3.46%

2.11%

1.81%

2.06%

Resignation rate of new employees
within three years

13.64%

0.00%

5.00%

7.69%

4.50%

Note: Scope of aggregation covers regular employees of NAKANISHI INC. who resigned due to personal circumstances. The resignation rate of new
employees within three years is calculated as of April 1 of each FY based on the number of new employees who joined three years ago and have resigned.

28

Human Capital Development
Basic Approach
A company is a collection of people, and it is the overall strength of those at NSK that represents the source of ourstrength. Human resources are our most important resource and most valuable asset. It is human resources that realizes our potential, and the quality of value exchange hinges on the quality of human resources.
We have formed a wonderful team consistent with the “Exciting, Quality, Open, Honest” style of NSK where everyone
shares a sense of excitement and fulfillment as well as a sense of joy and achievement at all times, and display theirabilities to their heart’s content.
Our motto is “Let’s increase individual value” and this is the ideal of our actions that we always keep close to heart. We
that maximizes individual value.

Socialmake this the basic policy of our human capital development and constantly undertake human capital development

Basic Policy of Human Capital Development
Our Motto“Let’s increase individual value”
Basic Approach to Human Capital Development

Company

Provide opportunities

Employees

Provide opportunities (human resource
system) for individual employees andthe company to grow together

Increase value

Able to obtain opportunities for individual
growth as long as they continue to increasein value29

Initiatives
Human Resource System That Increases Individual ValueAt NSK, one definition of growth is the improvement of value exchangeability with stakeholders. Our human resource
system is the tool that supports the development of human capital which achieves this growth.
Centered on Our Core, which encapsulates our values, we established systems for employee grade, evaluation, remuneration and capability development to achieve increase in individual value and individual and organizational growth,which is equivalent to improvement of value exchangeability. With these systems, we are building mechanisms that
support the development of human capital which achieves the improvement of value exchangeability with stakeholders.
Career-building guideline for achieving improvementof individual value exchangeability (growth)SocialRole & capability grade
system by career track

Remuneration
system

Evaluation
systemSystem to remuneratedemonstrated
individual values andresults (performance)

System for proper
evaluation ofdemonstrated
individual values andresults (performance)

Career & capability
development system
System to support growth and career building

Training & Education System
Continuous improvement of education and culture is essential for developing human resources.
At NSK, with increasing individual value as the basic policy of human capital development, human capital developmenttraining—such as corporate philosophy training, training by grade, business literacy training and specialized training—is conducted.
Our Motto“Let’s increase individual value”

Management

ValuesDevelopment ofmanagement executives
By gradeBusiness literacy

Specialization

Assistant Manager

Mid-level employees

New employees• Corporate philosophy• NSK University• Promoting women's success• Recognition of roles
Management, Assistant Manager, Mid-level
employees and New employees• Quality
Quality by grade• Ethics
Safety consideration
obligation; harassment• Communication
Disability training• Career formation
Career design training• Skill development
Problem solving(basic, elementary, intermediate, advanced)• Health
Mental health Engagement improvement& subordinate care training• Respective fields of specialization(conducted by each department)30

Spreading the message of “Our Core”
Our Core represents the corporate philosophy at NSK. Our Core broadly identifies the thoughts and ideal manner ofacting/existing that NSK should value in terms of the company as a whole, its various activities, and each and every
member. To enable all team members to share these values and implement them, all executives and employees undergo Our Core training on an annual basis. Through group training that is structured based on the employee’s role,such as those for managers, general employees, or mid-career hires, NSK can teach operations and ways of thinking invarious areas, leading to corporate activities befitting of NSK.

Fair Evaluation
To increase individual value and achieve individual and organizational growth—which is equivalent to improvement ofvalue exchangeability—NSK decides remuneration based on two aspects: performance evaluation that assesses theaccomplishment of tasks based on results, and role and capability evaluation that looks at behavioral characteristics
In addition, through our internal open recruitment system, we offer support for autonomous career development thatmatches, as far as possible, the careers that the company has in mind with the careers desired by employees.

Socialsuch as how roles and capabilities are applied.

We also create opportunities for the penetration and use of these human resource systems through interviews withsuperiors that take place three times each year.

31Diversity and Equal Opportunities
Basic Approach
NSK is a collection of diverse individualities. Individualities are characteristics possessed by each person. If we canbring together individualities from various backgrounds—such as nationality, culture, age, gender, education, work
experience and lifestyles—and fuse them while competing against and learning from each other to create unprecedented power, we will be able to overcome any kind of situation.
We respect diversity such as culture, practices, language and race. At the same time, we actively promote fair employment and utilization of human capital regardless of gender, age or disabilities. Through dynamic teams that achieve
breakthroughs by sharing thoughts and efforts and bringing together individualities, we advance efforts that allow
Socialeveryone to play active roles and keep aiming to create new value.

Initiatives
Women’s Success in the Workplace
The proportion of female employees at NSK is approximately 38.6%. The rate of women who are dentists, major customers for us, reached 25% (2020 census: Ministry of Health, Labor and Welfare). Also, many women are working as
hygienists. Increasing the rate of women in decision making in the company leads to better service and products.
We conduct activities to support careers for future female management candidates to increase the rate of women in
our management. We set the goal for the rate of women in our management as 10% in 2025. The rate of women in ourmanagement is 5.60% in FY2022.
During the first half of 2023, NSK held workshops for the superiors of female manager candidates, providing lessons
on alleviating unconscious biases, issues in personnel development, and communication methods to increase motivation. Furthermore, for female manager candidates, NSK holds periodic training programs that address leadership andcommunication in management positions.
Rate of Women in Management
FY2018NAKANISHI INC.

FY2019

2.70%

5.31%

FY20204.50%

FY20213.30%

FY2022
5.60%

Note: Figures as of January 1 of each FY

Localization of Management
NSK believes that what is essential to become the global No.1 brand is the building of strong sales and marketing
capabilities in major markets around the world and customer service and after-sales service capabilities to increasecustomer satisfaction. Currently, we have expanded our direct sales network to 16 bases around the world, including
overseas subsidiaries and representative offices.
Out of these 16bases, 12of them are led by employees recruited locally. We will continue to promote management
rooted in the cultures of countries and regions where we are located.

32

Interaction with Vietnamese Human Resources through Technical Intern Training Program
Since 2009, NSK has been accepting overseas technical interns from Vietnam. Currently, we have approximately 60
interns undergoing technical training. In 2016, we built a dormitory within company premises to allow all interns to live
in a clean and quiet environment. In addition, when constructing our new factory, we gave consideration to being able
to commute to work on foot or by bus through implementing dedicated shuttle buses. In addition, besides technicaltraining, we also provide opportunities for getting in touch with Japanese culture and traditions, such as participatingin local festivals and conducting regular trips to Mount Fuji, which are popular with the interns.
We restarted accepting overseas technical interns in April 2022 although we could not accept them for a while due tothe regulation of immigration under the COVID-19 spread. Besides, it became possible to offer technical intern training
for a maximum of five years for interns who wish to after finishing Technical Intern Training (ii), as applications forTechnical Intern Training (iii) for excellent interns were permitted.
Employment contracts are based on Japan’s laws and regulations and signed in Vietnamese.

NSK’s employment rate of persons with disabilities is 2.71% (FY2022), which has been increasing every year sinceSocialParticipation of Employees with Disabilities
FY2016.
Toward a society where persons with or without disabilities can work and live together, the Human Resource Department and workplaces collaborate to strengthen support systems and conduct regular seminars for encouraging
understanding of staff at workplaces where persons with disabilities work. In this way, we are promoting the creationof workplace environments where employees with disabilities can work easily and with motivation.
We also introduced the use of electronic memo pads and support from sign language interpretation volunteers incompany-wide events to support real-time communication with employees with hearing disabilities.
Employment Rate of Persons with Disabilities
FY2018
Employment rate (NAKANISHI INC.)

2.20%

As of June 1 of each FY

FY20192.32%

FY20202.42%

FY2021
2.57%

FY2022
2.71%

Reemployment Initiatives
To promote the employment of employees who retired at the mandatory age of 60, we have established a retiree
reemployment system. In addition, we also employ part-time workers after they pass 60 years old.

33

Conducive Workplace Environments
Basic ApproachWith being the “To be The Leading Excellent Global Medical Device Company” stated in NSK’s long-term vision VISION2030 in mind, efforts are being made to improve workplace environments, establish human resource systems
and create the best workplaces with motivation so that everyone working at NSK can work with motivation and continue to apply themselves at their workplaces.

SocialInitiatives
Creation of Comfortable Workplaces Offering Peace of Mind
—New Headquarters R&D Center and A1 Factory
NSK’s new headquarters R&D center (RD1) is equipped to serve a headquarters function and a research and development function to achieve efficient operations. In particular, to raise the level and speed of new product development,
we have created an environment to make it easier for development designers to work assisted by state of the art
equipment.
In addition, our A1 Factory—which specializes in the integrated production of high-precision parts—comes completewith environmental hygiene and disaster-prevention facilities meeting high standards so that employees can work
comfortably with peace of mind. It also has comprehensive measures against oil mist.

RD1

Center Court

Research and development

A1 Factory

Production facilities

Canteen

34

SUNNY CAMPUS“SUNNY CAMPUS” is the name given to the entire premises of NSK’s headquarters.
“SUNNY” is derived from “Hinata” (toward the sun), the name of the area in which
our headquarters is located. The name expresses our company ethos of always
reaching for the sun and working for a new dawn.
The word “CAMPUS” highlights our company’s dedication to production, operations, research and development, positioning this place as the center of innovation.
There are trees, ponds and streams within the campus as well as tennis courts,
a field and barbeque pits. We lend them out so that employees can use them toCampus overview

enhance health and communication after work or during non-working days.

Total site area : 105,000m2
Total floor area : 30,100m2

SocialNSK R&D Center
New M1 Factory under construction

Field

Tennis courts

Different flowers bloom during eachseasonHuman Resource System Supporting Diverse Working Styles
At NSK, a system for working from home has been introduced to support diverse working styles that increase options
for time and place of work.
In addition, we introduced a paid leave system by the hour so that it is easier to balance work and private life, thereby
encouraging the taking of paid leave. The rate of taking paid leave in FY2022 was 59.0%.

35

Systems to Support Balancing Work and Childcare
As support for balancing work and childcare is an important theme for us, we have established systems for childcare
leave and shorter working hours that exceed statutory requirements. These systems are common for both regular andpart-time employees.
In FY2022, 14 employees made use of the childcare leave system and 100% of them returned to work. Five of themwere male employees. NSK has a target of 50% of male employees making use of the childcare leave system by 2025,
and results for 2022 were 20%. Through holding seminars to deepen understanding of the childcare leave system andapproaching eligible individuals, NSK will work to increase the ratio of persons making use of the program.

Nursing Care Leave
NSK has established various systems related to nursing care.
In addition to statutory nursing care leave, employees also have up to 10 days of our in-house nursing care leave eachcare. Employees can take up to 40 days of nursing care leave, when combining accumulated paid leave. One employee
made use of the statutory nursing care leave system in FY2022.

Socialyear, which can be taken in full-day, half-day or hourly units, depending on the number of family members who need

Furthermore, in FY2021, we introduced a system for working from home, which can be used for childcare or nursing
care, to support balancing work with caring for children/family members.

Communication between Employees and Management
NSK has an activity called O-Time (Opinion Time). Employees, either self-nominated or nominated by others, discuss
on a specific theme related to the company for approximately four months and make proposals to the management.
Although the activities were interrupted from the viewpoint of preventing COVID-19, we have restarted discussing.
So far, 18 themes have been discussed with several proposals implemented.
Examples of proposals

Safety Driver’s Card

dialogues with the President
and Executive Vice President

signages

Stress & Engagement Survey
Together with the annual stress checks for employees, NSK also conducts an employee engagement survey. We haveestablished a PDCA cycle as an initiative for health and productivity management with the reduction of high stress andlow engagement rate* as a target.
The survey results are given as feedback to the departments, which then analyze the results and develop and executeaction plans to improve on issues.
* High stress and low engagement rate: The rate of respondents with a low engagement score in addition to having a stress scorehigher (worse) than the standard

36

Employee benefits
From the viewpoint of enriching employee benefits (asset creation) and increasing participation and awareness inmanagement, NSK has introduced a stock ownership plan. Employees who participate in the stock ownership plan
receive an incentive of 15% for money paid in to the plan, and can conduct asset creation by reinvesting dividends fromshares held back into the stock ownership plan. Additionally, NSK also provides the life plan support system, a type ofelective pension plan, to support asset creation for employees after retirement.

Social37

Occupational Safety and Health& Health Management
Safety Policy
NSK states that safety is prioritized over productivity and efficiency in its corporate philosophy. We formulated oursafety and health management regulations aimed at creating comfortable work environments that ensure the safety
and health of our employees and people who cooperate in our operations. We actively and continuously work on the
improvement of working environments and enhancement of both mental and physical health to promote the creationof cheerful and vibrant workplaces without accidents or illnesses.
Based on these regulations, we work on improvement activities to reduce the load on workers and make it easier togive top priority to the health aspects of employees.

Socialwork. In addition, based on our Nakanishi Health Management Declaration, we have made it a companywide policy to

Safety Management Structure
At NSK, the Health and Safety Committee—which makes decisions about basic matters to enhance safety and healthactivities and prevent occupational accidents—is established based on the safety and health management regulations
to ensure the safety and health of employees at the workplace.
Administration Division
Dental Business Division
Industrial Business Division
Surgial Business Division
Overall Safety
and Health Manager

Committee
Chairperson

Committee
Vice-chairperson

Customer Service Department
Quality & Regulatory Affairs Division
R&D Division
Manufacturing Division

Joint Safety Management by Labor and Management
NSK’s safety and health targets cover the number of occupational accidents resulting in time away from work and the promotion ofdental, physical and mental health and productivity management. We work toward these targets centered on the Health and Safety
Committee. The committee adopts measures to prevent accidents from short- to long-term perspectives based on the approach ofrisk assessment, such as the elimination of occupational accident risks discovered during workplace patrols.

38

Initiatives
Occupational Accident Statistics
Number of Fatal Accidents during WorkFY2018FY2019FY2020

FY2021

FY2022

Employees

0

0

0

0

0

Dispatched employees

0

0

0

0

0

Note: Scope of aggregation covers regular and dispatched employees of NAKANISHI INC.

State of Accidents Resulting in Time Away from Work at Sites in Japan
FY2018
Number of employees
who required time away from work

FY20193

As of December 31 in each FY

FY20200

FY2021
2

FY202200SocialInitiatives to Prevent Occupational Accidents
NSK takes measures to prevent occupational accidents by conducting occupational accident risk assessment eachyear centered on the Health and Safety Committee.

Conduct of Safety Education
Besides conducting the following training regarding safety education, the required education is conducted at each
workplace.
• Safety education training (work supervisor education)• Danger experience seminar• Dust explosion workshop• Safe driving workshop• First aid workshop• Automated external defibrillator (AED) workshop

39

Health and Productivity Management
Based on our Nakanishi Health Management Declaration
which is our philosophy for promoting health and productivity
management, NSK focuses on dental, physical and mental
health when being more active in promoting health enhancement activities, identifying health issues and taking measures.

Nakanishi Health and Productivity Management Declaration

health expectancy for people based on the approach that dental health leads to physical health.

SocialAmid a society that is growing old rapidly, NSK strives to contribute toward the extension of
To achieve this approach, we think that the most important thing is for each and every employee
to continue to be healthy.
“Let’s increase individual value”—stated in our motto—also applies to health.
We declare that we will actively undertake various health enhancement activities so that eachand every employee can take the initiative to maintain and enhance mental and physical healthautonomously to increase individual health value.

NAKANISHI INC.
President & Group CEO
Eiichi Nakanishi

Promotion Structure
NSK has established the Health Management Promotion Committee, and health and productivity management promotion measures discussed and decided by the committee are promoted by the Health Enhancement Section of the
Human Resource Department—which acts as the secretariat—in collaboration with affiliates within and outside thecompany. Two meetings were held during FY2022.

President

Health and Productivity
Management Promotion Committee
Secretariat: Health Promotion Section
Collaborate

Consult

CollabIndustrial
physicianorate

ReportDiscuss

Health and Safety
Committee
ExecuteCollaborate

Collaborate
Consult

Health insurance
societyConsult

Counselor

PromoteEmployees

40Management issues and health issues
As NSK celebrates its 100th anniversary in 2030, the proportion of the Japanese population aged 65 or over is projected to exceed 31%. To support sustainable growth in such a rapidly ageing society, NSK must not only contribute to
the extension of health expectancy, but be a company where each employee can have a long career undertaken withenthusiasm.
Our lives and bodies are maintained through the food we eat every day. The mouth is essentially the entryway forlife, serving as the first line of defense in protecting health. As measures to maintain long-lasting health and enable
enthusiastic, sustainable workstyles, we approach the issue from the three facets of teeth, body, and mind.
The proportion of female employees at NSK also exceeds 40%. Activities to improve literacy regarding women’s healthnot only serve to increase productivity and create a comfortable working environment, but we also believe it to be an
investment in the health of the next generation.

Key measures: Health investment management accounting (Strategy map)

Dentalexams

Measureimplementation
index

Awareness /behavioral change
index

Dental exam support
subsidy

Ratio of additional
dental health exams

Ratio of persons
with tooth decay
receiving treatment

Implement dental
training

Training participation
rate

Final target
index

Management issues
to be solved by healthmanagement

SocialHealthinvestment

Tooth decay
testing
additional ratio
Dental health

Maintenancecontinuation rate
Maintenanceexpense support

Periodicexams
Cancerscreening

Smoking cessation
expense support

Increase in number ofsmoking cessation
counseling

Implement specifichealth guidance
during working hours

Rate of implementationof specific healthguidance

Nutrition advice

Rate ofimplementation ofnutrition counseling

Cancer screening
expense support

Recommendation for
additional cancer
screening exams

Women’s healtheducation

Women’s healthseminar participation
rate

Gynecologic
cancer screening
rate

Implement shoulder
discomfort, lower backpain, headachecountermeasure seminars

Attendance rate forcountermeasure seminars
for shoulder discomfort,
lower back pain, headache

Alleviate shoulder
discomfort, lower backpain, and headache

Attendance rate
Self-care and line
care training

Stress &engagement
surveys

Return to work
support program

Number of times line
care manual is used

Implementation rate

Number of persons
attempting
smoking cessation

Health counselingsatisfaction

Decline in rate ofdiscovery(Lifestyle diseases)

Rate of additional
screenings
performed

Prevent new cases
and recurrence ofleave related tomental health issues

Reducepresenteeism*1
Physical health
Reduceabsenteeism*2

Improveengagement

Have a longcareerundertaken
withenthusiasm

Reduce ratio of
persons withhigh stress

Return to work

Mental health

Formulate action plan

Corporatephilosophy training

Results frominitiatives

Improveengagement
score

Attendance rate

*1: Presenteeism
Depressed performance due to health issues*2: Absenteeism
Absenteeism due to injuries and sickness

41

Target indicesDental Health
It has become widespread knowledge that tooth and oral health is deeply connected with health of the overall body.
As a company that is involved in oral hygiene, NSK conducts measures for creating healthy teeth and mouths.
NSK implements oral exams internally for all employees, and we encourage those persons with tooth decay to be
examined at a dental clinic.
We will work to improve health literacy by ensuring that each person becomes interested in healthy teeth, leading toactions such as treatment and continued maintenance.
Deadline: Until March 2026

Targets

Tooth decay testing additional ratio 100%

At present: Ratio of persons receiving treatment at dental clinics after discovery of tooth decay at dental exam
FY2022SocialFY2021
FY202055.3%
Ratio of non-implementation of dental exams due to spread of COVID-19

Physical HealthAs an initiative to improve citizens’ health, “Healthy Japan 21” designates various indices that aim to extend healthexpectancy, prevent lifestyle diseases, etc.
Based on medical examinations and survey results on health awareness, NSK has established targets regarding the
below topics, and will implement various measures.
Preventing lifestyle diseases

High blood pressure, hyperlipidemia, and diabetes, the three major lifestyle diseases, can progress with relatively few
symptoms, creating the risk of serious diseases such as stroke or coronary heart disease.
To lead a full, healthy life, it is important to be healthy from a working age. NSK will work to implement measures so thateach person can properly understand lifestyle diseases, leading to activities for prevention and mitigation.
Deadline: Until March 2026

Targets

Decline in discovery of three major lifestyle diseases

At present: Ratio of persons with the three major lifestyle diseases*
FY202235.5%

FY2021

33.1%

FY202038.0%*Persons who have been identified as requiring monitoring or treatment for high blood pressure, hyperlipidemia, or metabolic issues (excluding persons
already undergoing treatment)42

Early cancer detection

In recent years, cancer has become a disease that can be dealt with over the long term while people can continue with
their careers. However, cancer treatment also requires long-term sick leave and is a challenging experience.
For the early detection of various cancers, NSK implements cancer screenings as part of its mobile health examinations. For particularly important screening items, recommendations are made for additional exams for those people
who are initially deemed to be at high risk.
By engaging in measures for the early discovery and early treatment of cancer, we will work to reduce absenteeism
and presenteeism.
Deadline: Until March 2026

Targets

Rate of additional exams performed leading to early cancer detection 100%

At present: Rate of undergoing additional cancer screening
uterus/breast

prostate

90.0%

57.1%

FY2021

64.9%

89.5%

-

FY2020-Socialstomach/lung/colon
44.6%

FY2022

Mental Health“Healthy” is defined as a state in which physical, mental, and social needs are met. To create a workplace where
employees can work in good health and with enthusiasm, NSK implements a stress check as part of its engagement
surveys. Results are provided in the form of feedback to each department, and each organization creates an action
plan.
Furthermore, through the use of support from various angles, such as self-care, line care, and external counseling, wework to implement countermeasures for high stress, and conduct activities leading to high engagement.
Deadline: Until March 2026
Targets

Ratio of employees experiencing high stress: 10% or less / Maintain engagement score of 50 or more

At present: Mental health index

FY2022

Ratio of high-stress individuals

Engagement score

14.5%

49.8

FY2021

15.0%

49.1

FY202012.2%

48.0*1*Data collection method changed from 2020 to 2021

43

Status of implementation of measures to achieve targets
Dental HealthContents

FY2019FY2020, FY2021

FY2022

Dental health examination

91.6%

Persons with tooth decay

36.9%

Ratio of non-implementation of dental
exams due to spread of COVID-19

24.0%

Participation rate in dental training

-

-

97.5%

Maintenance persistency rate

-

-

40.4%

93.7%

Although NSK implements group dental exams at our headquarters and the Tokyo Office, moving forward we will
aim to achieve an examination rate of 100% via measures such as expanding group exams and creating structures for
expense subsidies, ensuring that employees at other offices have opportunities to receive examinations.
Dental training is conducted under the theme of oral hygiene and full-body health. We believe it important to deepen
awareness of lifestyle choices that can prevent periodontal disease.

Contents

FY2020

FY2021

FY2022

FY2022

Health insurance
averageHigh blood pressure

8.6%

7.8%

8.2%

11.0%

Dyslipidemia

31.7%

25.5%

27.0%

31.4%

Metabolic issue

4.2%

6.6%

8.2%

12.3%

Rate of implementation of first guidance session for specifichealth guidance

80.4%

4.8%*3

93.5%

Number of nutrition advice sessions implemented-

6 persons*4

24 persons

Smoking ratio

22.8%

21.3%

20.0%

-

54.1%

56.1%

Ratio of persons with the three major
lifestyle diseases*1

Persons with physical symptoms(Any from among shoulder discomfort / Lower back pain / Headache)

SocialPhysical Health*1: Persons who have been identified as requiring monitoring or treatment (excluding persons already undergoing treatment)*2: A testing institution change in 2021 caused the implementation rate to decline; implementation rate improved in 2022 due to the below measures*3: Implemented from November 2021

Regarding lifestyle diseases, NSK sees it necessary to encourage behavioral changes, such as improving lifestyles
in areas including nutrition and exercise while receiving medical attention as required. We were successful in having
more employees take part in specific health guidance by having the first guidance session be done by appointment.
Moving forward, we believe that measures such as evaluations on completion of specific health guidance and expansion of nutritional counseling availability to employees will be necessary.
As smoking has effects on not only overall health but periodontal disease, NSK engages in smoking cessation activities. Internal surveys have revealed that 46% of smokers would like to quit if possible. We will create a corporate culturethat makes it easy to try quitting smoking, and supports those who take on the challenge.
We have also discovered that employees engaged in manufacturing have a high rate of shoulder discomfort, lower
back pain, and headaches. With the aim of reducing presenteeism, NSK will conduct activities to alleviate bodily
symptoms.

44

Measures for women’s health
Examination rate

FY2021

FY2022

Breast cancer screening

77.9%

69.4%

Cervical cancer screening

65.6%

63.5%

NSK will aggressively work to increase the rate of cancer screenings to enable early cancer detection for breast cancer
and cervical cancer, which have particularly high rates of diagnosis during women’s working years. Specifically, tospread proper knowledge of breast cancer, the following themes will be used in promotional activities.
• Let’s get screened for cancer• Let’s do self-checks every month for breast cancer• Let’s think about it with our families
An annual seminar is held under the theme of women’s health.
• 2021: Breast cancer seminar
Social• 2022: PMS seminar
Mental HealthContents

FY2020

FY2021

FY2022

Leave rate*1

0.55%

0.45%

0.65%

Number of mental health e-learning courses implemented

-

94.5%

93.8%

Return to work support program implementation rate-

Results for measures to formulate action plans-

Corporate philosophy training

Not conducted due to theimpact of COVID-19

33.3%
-

98.5%
99.1%

*1: Months of leave taken / (Full-time employees + part-time employees X 12) X 100

Contents
Return to work rate*2

FY2019-2021-

FY2020-FY2022
66.7%*2: Persons who have returned to work within three years after taking leave due to mental health issues

As mental health measures, NSK implements e-learning for managers with the objective of enriching line care. Moving
forward, we will work to implement e-learning to improve self-care abilities for non-management employees.
Even if taking leave for mental or physical reasons, we will provide support to ensure that employees can return towork with peace of mind after receiving care. Counseling upon returning to work is an opportunity to deepen understanding of stress and learn about coping methods. Additionally, in areas such as preparation for returning to workand follow-up after returning, the three parties of the departments, the Health Enhancement Section, and external
specialist institutions will work as a team to provide support for returning to work and to prevent recurrence.
We hold corporate philosophy training once a year for all employees. NSK aims to share its vision and encourage active
contributions..

45

Respect for Human Rights
Basic Approach
Human rights are rights that all human beings are born with and a universal value.
A company is a social system that contributes toward society’s expectations and people’s happiness. Its management
is but a public institution that must follow the logic of people.
NSK is always oriented toward the ideal of companies as public institutions of society. We carry out management notbased on the company’s logic, which puts the company at the center, but based on the logic of people.
We respect the human rights of every person and do not accept any form of discrimination (such as gender, age, nationality, race, ethnicity, ideology, belief, religion, birth, education, disabilities, illness and marital status), forced labor,
Based on the above policy, we respect the principles regarding human rights in the United Nations Global Compact
and will realize the qualities required by society. We respect the human rights of our employees and those working at

Socialand child labor. In addition, we treat everyone with the same respect and dignity.

our company based on laws and regulations as well as employment rules.

Initiatives
Human Rights Risk Evaluation
NSK checks the state of harassment through the stress & engagement survey conducted annually for all employees
and takes corrective actions as appropriate.

Human Rights Awareness & Education Training
NSK strives to prevent violations of human rights by conducting education for purposes such as preventing harassment (annoyance) and spreading the correct knowledge about work.
We conduct training regarding harassment and labor management in the training organized for new managers eachyear. At the same time, based on the results of stress checks and engagement surveys, we conduct harassment training for existing management and managers as appropriate. In FY2022, 181 managers attended the training.
The Company defines Compliance Behavioral Guidelines that contain regulations on respecting human rights, creating fine working environments, and preventing harassment. Additionally, by publishing a compliance newsletter every
month, NSK is working to enhance knowledge and awareness regarding human rights.

Hotlines for Human Rights-related Whistleblowing and Consultation
NSK has established hotlines that can be used freely by all employees and overseas technical interns for consultation
about their worries at the workplace and problems in the working environment. Information regarding whistleblowing
is handled strictly so that they can use the hotlines with peace of mind. Employees and interns will not be penalized
because of whistleblowing or consultation.
The hotlines are established with the Human Resource Department internally and with an external agency outside thecompany. Whistleblowing is possible through telephone, fax or email. In FY2022, there was eight case of whistleblowing reported internally and one case externally.

46

Responsible Supply Chain
Basic Approach
The supply chain, leading from the procurement of raw materials and parts to manufacturing, distribution, inventory
management, sales, use and disposal, can include social issues such as human rights abuses, poor working conditions, environmental destruction and conflict minerals, especially in raw material procurement and secondary andtertiary business partners. These problems are seen as a global issue.
To ensure sustainable procurement, companies are required to expand purchasing management to not only their own
purchasing but their entire supply chain, contributing to resolving this social issue.
At a time when poverty is causing human rights and labor issues to become increasingly serious, and the social envipartners and working to strengthen our purchasing abilities is more important than ever. Based on an optimized, solid
procurement platform, we will contribute to the creation of a sustainable society by aiming to resolve social issues

Socialronment is changing at an accelerating pace, NSK recognizes that deepening our relationships with our procurement

such as conflict minerals through collaboration and dialogue with our procurement partners.

Initiatives
Business Partner CSR Guidelines / Green Procurement Guidelines
NSK’s corporate activities are founded on our raison d’etre of “creating brilliant progress” as a way so the society inwhich we live can make better progress. In addition, we also hold that the definition of a company is a social systemthat seeks happiness and contributes to the expectations of society and the happiness of people through the exchangeof value.
This raison d’etre and company definition are defined as our basic principles and management philosophy, which all
officers and employees must abide by, and we work to ensure they are all aware of them. In addition, we are committed
to meeting society’s expectations in terms of safety, quality, compliance, environmental protection, stable supply andfair value.
Also, we believe it is important to promote these initiatives through our business during our procurement of raw
materials and services. NSK created our Business Partner CSR Guidelines in April 2021 as a way to respond to the
expectations of society in collaboration with all our business partners, and put together the items we want our business partners to work on. Specifically, the regulations define matters related to appropriate and fair trade, conformity
with laws and regulations, banning of bribes and giving and receiving inappropriate benefits, protection of intellectual
property, abolishment of discrimination, banning of child labor, creating safe and healthy workplaces, and preventionof environmental pollution, and NSK requests conformity with these matters from its transaction partners.
Awareness at transaction partners
In response to social demands regarding compliance, human rights, labor, the environment, etc., NSK distributes theBusiness Partner CSR Guidelines to all suppliers to create a responsible supply chain. Additionally, excluding supplierswith which transaction amounts are extremely limited, NSK sends an annual survey to all suppliers with which wehave regular transactions, and the response rate for 2022 was 100%. The survey includes questions related to quality,
compliance, and the environment, and we evaluate each supplier in this context.
Furthermore, for critical suppliers and new transaction partners, we annually conduct on-site audits primarily focusedon quality management systems (QMS) and environmental management systems (EMS).

47

Healthy Corporate Activities
We respect our suppliers and other business partners as equal partners based on the principle of good faith, aiming formutual prosperity and practicing sincere, fair, and equitable corporate activities. In addition, we do not carry out any
unfair or improper activities that take advantage of our superior position.
To ensure thorough compliance with the Subcontract Act, a relevant law and regulation, NSK provides education toemployees in procurement departments.
Monitoring Human Rights Issues across the Supply Chain
We monitor human rights issues and risks such as slave labor, human trafficking, forced labor, and child labor in the
supply chains that feed us the parts and raw materials for our products, and strive to comply with the laws and regulations.
In addition, we have established our Green Procurement Guidelines for managing chemical substances.
>Related Link:
Green procurement

SocialBusiness Partner CSR Guidelines
Statement regarding the UK Modern Slavery Act

Response to the Conflict Minerals Issue
Certain minerals (tin, tantalum, tungsten, and gold) produced in the Democratic Republic of the Congo and neighboring countries have been reported as being a source of funding for armed groups, and may be contributing to humanrights abuses caused by their conflicts. This is an issue that arises at the start of the supply chain, and we at NSK areaware that we need to take responsibility for addressing it.
Therefore, we have stopped using conflict minerals from the Democratic Republic of the Congo and neighboring
countries in our products, parts, and materials, as we aim for a society where there are no abuses of human rights inthe mines that are the start of our supply chain.
We carried out an investigation into conflict minerals, and, within the scope of the investigation, confirmed that there
was no evidence of our involvement with these specific minerals or with conflicts.

48

Relationships with the Local Community:
Social Contribution Activities
Basic Approach
The NSK Group holds up the mission of creating “brilliant progress” via innovative “grinding technology” at the“Our Core” values of corporate philosophy. To achieve this, we contribute to the extension of health expectancy
for people all over the world through our corporate activities, and at the same time, we carry out a range of social
contribution activities as a company rooted in our local community. Our products are sold in more than 135 countries
around the world, and we carry out our business activities in many different countries and regions mainly throughour headquarters and the overseas subsidiaries we have set up in 16 countries. Amidst this, our group holds CPS
strives to provide solutions to social issues by drawing on our partnerships with the various local stakeholders, while
we deepen our understanding of the cultures, societies, and environments of the various countries and regions weSocial(Culture-oriented, People-based, Social-perspective) as its core premise when carrying out our business. Our group

operate in.
Our headquarters is located in a rich natural environment, overlooking the Oashi River, a major river famed for its
clear waters. Inspired by the original Japanese name of the place, we gave it the name SUNNY CAMPUS. While it
is of course the headquarters of our group’s business, we also hope that it will continue to be a place of organicinteractions with the local community.
NSK products end up all over the world, but most of them are produced either at our headquarters factory in SUNNYCAMPUS, or the A1 Factory next door. As the slogan “Made in KANUMA” suggests, for our group, which continues tocarry out integrated production in the Kanuma region, maintaining good relationships with the local community is
one of the key management issues. As a good corporate citizen, we intend to continue carrying out a range of social
contribution activities that build on the demands and expectations the local community has of us.

49

Initiatives
Main Recent Initiatives
Open SUNNY CAMPUS“SUNNY CAMPUS” is the name we give to the entire site where our headquarters factory is located. The sports field,
tennis courts, and other facilities on the grounds are made available for local educational institutions and so on to use
for free.

SocialNSK Rising Event
NSK holds the NSK Rising Event as a way for both us and our local community to continue rising up together. At thisevent, we invite locals to cultural events held and improve the cultural level of our employees.
Although this event commemorating the completion of RD1 at our headquarters was suspended due to COVID-19, it
was held for the fourth time in October 2022 after a three-year break, with participation by a total of 370 people from
Tochigi Prefecture and other locations.

October 2022

September 2019

Dai Miyata & Kazuma Miura duo recital

Syunputei Ichinosuke
Traditional rakugo (Japanese comic storytelling) performance

Cellist Dai Miyata and bando-

Syunputei Ichinosuke, whose

neon

performances

playerKazumaMiura,

are

some

of

two of Japan’s top musicians,

the hardest for which to ac-

performed an extensive selec-

quire tickets, performed thetion from a repertoire of various“Hatsutenjin” and “Mekauma”

generations and genres. The

stories. After an intermission,

venue was filled with the rich

Koneko Edoya made an appear-sound of the cello and bando-

ance and thrilled the crowd withneon.

a mimicry performance.

December 2018

December 2017

Master of wine

Noh actor Shonosuke Okura

Lecture by Kenichi Ohashi

Performance

Kenichi Ohashi, who is one of

Attendees enjoyed a taiko drum

only two Japanese people toperformance and mesmerizing

hold the title of Master of Wine,show by noh actor Shonosuke

held a lecture. Attendees lis-

Okura, who has been com-

tened intently to various anec-

prehensively designated as andotes that only someone with aimportantglobal knowledge of wine could

asset.

intangible

culturalprovide.

50

NSK Nakanishi Foundation (scholarship, R&D grants)
The NSK Nakanishi Foundation is involved in the development of motivated,capable dentists through scholarships provided to dentistry students. It was
founded in October 2016 by NAKANISHI INC. with the aim of contributing to thefurther development of dental medicine.
As of April 2023, a cumulative total of 202 students and 42 graduate students
have received scholarships, having a significant effect on the development ofoutstanding dentists.

1st NSC Salon held

From August 2023, in addition to the scholarship business, we began to provide
R&D grants for medical devices exclusively in the sectors of implant treatment,
periodontal disease treatment, and neurosurgery (spinal) alongside foreignexchange program support for researchers who wish to study dentistry overseas.
Furthermore, in September 2021, NSK launched the Nakanishi Scholarship Club (NSC) as a place where current
scholarship recipients and alumni can meet, learn, and exchange knowledge. As part of the NSC’s initiatives, the firstgroup events.

SocialNSCSalon (NSC gathering) was held in October 2022 followed by the second in March 2023, featuring seminars andMoving forward, we will continue to focus on developing dental human resources and the advancement of medical
devices, making further contributions to realize a healthy human population across the world and a prosperous society.

Sponsorship of Local Sports Teams
NSK has signed sponsorship agreements with a number of professional sports
teams in Tochigi Prefecture. Encouraging sports together with employees andlocal residents, it continues contributing to revitalizing the local community andencouraging[promoting] sports in it.

Membership in B.LEAGUE
Professional basketball teamUtsunomiya Brex

Membership in Japan Cycle League
Professional cycle road racing teamUtsunomiya Blitzen

Membership in J.LEAGUE
Professional soccer teamTochigi Soccer Club

Membership in Asia League Ice Hockey
Professional ice hockey club

H.C. Tochigi Nikko Ice Bucks

Membership in ROUTEINN BCL
Professional baseball teamTochigi Golden Braves

Hosting Field Trips and Corporate Tours
NSK actively engages with requests for field trips and corporate tours fromeducational institutions in Tochigi Prefecture. Stemming from our wish to provide an opportunity to experience work to the children who are our future, wetake particular care to actively respond to field trip requests from grade schools
within Tochigi.

51

Future Creation University for Children in Tochigi Project
We want to provide children with opportunities to “touch and learn from thereal thing” and help them create their own visions of the future. We have beenpart of the Future Creation University for Children in Tochigi project run by theprefecture since 2018. We also host a number of social studies class visits fromelementary schools throughout the prefecture.

Sponsorship of National Sports Festival of Japan in Tochigi (Ichigo Ichie Tochigi Kokutai)
We co-sponsored the Ichigo Ichie Tochigi National Athletic Meet held in October 2022. The National Athletic Meet began in 1946 and is the largest sports festival in Japan, held annually by prefectures. We sympathized with the national
polity philosophy of promoting health and improving physical fitness through the spread of sports, and supported thenational polity as a partner for the first time in 42 years when it was held in Tochigi Prefecture.

NSK has held blood drives for many years now. Twice a year, in May and November, we work with the Tochigi Red Cross

SocialBlood Donation at the Headquarters and A1 Factory
Blood Center to hold a blood drive at our headquarters and A1 Factory. Each time, about 120 people donate blood.
The coronavirus pandemic caused a shortage of blood in 2022, so we upped our blood drives to four times a year, inMarch, July, November, and December.
Support for Kanuma Rotary Club’s Education for Job-seekers
We continue to support job-seeking activities for local students who are approaching the milestone that is graduation.
We take charge of courses for job-seeking students run by the Kanuma Rotary Club, and hold seminars on interview
techniques.

52

Environment

Environmental Management
The environment that surrounds us continues to experience exposure to numerous crisis situations, including theincreasing frequency and intensification of natural disasters induced by climate change, the prolonged impact of the
COVID-19 pandemic, and global tension from the Russian invasion of Ukraine. A series of major problems are hitting us
in quick succession, and doubts are being raised about the actual sustainability of human society. These situations are
shifting people’s lifestyles and values in many respects, and creating even more new social issues.
Furthermore, the need to address environmental issues on a global scale has already become an unavoidable truth anda topic to which companies are dutybound in fulfilling our responsibility to society. We recognize that the recent conversation around global warming is a common issue that is shared across international borders, and amid the growing
urgency to reduce greenhouse gas emissions as a response to climate change, efforts toward the realization of carbon
neutrality are accelerating to the next stage in countries around the world.
With this background in mind, the importance of corporate activities toward realizing a sustainable society is rising.
Companies are required to understand the risks and opportunities posed by climate change to their businesses, set
long-term reduction targets, and work to reduce greenhouse gas emissions across the entire supply chain. It is also expected that local communities, companies, and the whole world will work together to resolve important environmental issues. Accordingly, we believe that companies have an increasingly important role to play in solving environmental
issues, and that companies are dutybound to respond to the various needs and expectations of society.
At NSK, we recognize that addressing environmental issues such as climate change is a management issue of theutmost importance. We intend to use the monozukuri (manufacturing) expertise and advanced technological capabilities we have accumulated to demonstrate solutions to environmental problems, and build a foundation for achieving
SDGs by steadily advancing wide-ranging initiatives. These include strengthening legal compliance, reducing theenvironmental impact of our monozukuri, promoting environmental education and communication and conserving
biodiversity.
FY2022, we reduced all greenhouse gas emissions (Scope1 and Scope2 GHG emissions) at our domestic production
sites (Headquarters Factory and A1 Factory) to zero, obtained carbon neutrality verification by a third-party organization, and started monozukuri at “zero-CO2 factories” ahead of our competitors. In addition, “implementing measures
toward realizing carbon neutrality” has been set in the President’s policy for FY2023, and we have started consider-

Environment

The company is already making contributions toward realizing a society that is carbon neutral and sustainable. In

ations for reducing greenhouse gas emissions across the entire supply chain while promoting various other measures
such as reducing energy use, the decarbonization of energy, and innovation in manufacturing processes.
At NSK, we recognize we are both a member of society and a company that contributes to the global environment.
In response to environmental issues such as climate change, we have defined “coexistence between people and theearth” as one of our goals, and we intend to promote our Green Plan 2030 medium-term plan.
By integrating our technological capabilities and inventiveness, and by resolving societal issues and growing ourbusiness, we believe we can contribute to the creation of a bright future. We understand this to be a corporate duty,
which we intend to fulfill as part of our responsibility to society.

54

Environmental Policy
NSK is working toward our goal of “coexistence between people and the earth” through increased efficiency in theuse of energy and resources and promoting diversity and recycling while providing innovative products and services
to customers. We believe that by working to spread an accurate understanding of the environment to each and every
person and focusing on maintaining the suffix of “-friendly” in relating to people, society, nature, and the planet Earthin all of our business activities, we will be able to create a society that is more prosperous than ever before.
At NSK, based on our Environmental Policy, we take the environment into consideration in our business activities.

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 business activities, thefollowing environmental activities based on the goals of reduction of environmental impact for
the global environment of the future, harmony with nature, and the establishment of a healthy
and prosperous society:1. Promotion of environmental protection, including prevention of contamination
NSK reduces environmentally hazardous substances in all of its activities to prevent
contamination and protects the natural environment from harm and degradation arising fromorganizational activities, products and services.

conservation
NSK continuously improves its environmental performance in all fields of its activities including
manufacturing products, focusing on energy conservation for global warming prevention andrecycling for resource conservation.

Environment

2. Continuous improvement of the environmental performance of energy and resource

3. Compliance with environmental laws, regulations and other voluntary standards
NSK ensures compliance with environmental laws and regulations related to all of its corporate
activities, products and services and standards judged to affect the needs and expectations ofinterested 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 to manufacturing, sales, use anddisposal, 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 andeconomical abilities.
5. Promotion of communication with stakeholders
NSK communicates with stakeholders, including those in the surrounding areas, to maintain theenvironment.
6. Dissemination of environmental policy
NSK communicates environmental policies and the importance of global conservation to all
related stakeholders.

55Environmental Management Promotion Structure
At NSK, our President and Group CEO is responsible for overseeing the promotion of environmental management.
Under his supervision, we proactively execute our responsibilities centered on the following four key aims:
1. Operation of the Environmental Management System
2. Providing environmentally friendly products
3. Establishing environmentally friendly monozukuri systems
4. Promoting environmental communication
5. Response to environmental issues such as climate change and resource recycling, etc.
6. Calculation and verification of Greenhouse Gas (GHG) Emissions
In order to promote these aims effectively, we have integrated our company’s environmental activities in a cross-departmental manner; specifically, we have appointed an Environmental Control Manager and established the EMS
Section as the secretariat responsible for supervising these promotions. These personnel and organizations are
responsible for debating and making decisions on key matters, such as defining our Environmental Policy and environmental activities, ensuring we comply with environmental laws and regulations and making recommendations to the
management.
We have also established the Environmental Committee, which is responsible for the operation of the Environmental
Management System, document reviews and the promotion of energy conservation and the 3Rs (reuse, reduce, recycle).
Likewise, we have established the Pollution Prevention Subcommittee, which monitors the RoHS Directive and otherrequirements for chemical substances in various countries and seeks to prevent chemical substance pollution andreduce environmental risk. These committees examine and deliberate all manner of issues, and the conclusions arereflected in activities throughout the company.
Environmental Management Promotion Structure

Environmental Policy• Environmental Targets• Plans

Environmental Control Manager

Environment

Environmental Management Supervisor(President & Group CEO)Environmental Control Secretariat(EMS section)

Headquarters
Factory

A1
Factory

Tokyo
OfficeOsaka
OfficeNagoyaOfficeEnvironment Committee• Preparation of environmental impact assessments, environmental targets, action plans and EMS documents• Establishment and implementation of annual environmental targets• Calculation and verification of Greenhous Gas (GHG) Emissions• Promotion of improvement activity toward climate change• Company-wide activities related to energy and resource conservation• Establishment of subcommittees (committee members appointed from all departments)

Pollution Prevention Subcommittee

Departmental Subcommittee• Management of chemical substances• Response to chemical substance regulations• Green procurement• Activities of relevant departments• Environmental activities of each department• Report to the Environmental Committee

56

Identifying Environmental Risks and Opportunities
At NSK, we have established an Environmental Management System that conforms to ISO14001; through this management system, we identify important risks and opportunities related to environmental issues, discuss how to respond tothese issues and implement action plans accordingly.
In addition, based on the concepts outlined in ISO14001:2015, we are in the process of establishing systems to identify
risks and opportunities with the potential to impact our business activities in a manner that exceeds merely an environmental framework. Examples include “external and internal issues that can affect an organization” and “the needs
and expectations of interested parties.”
In FY2022, we have been developing activities toward the realization of carbon neutrality* by striving to take an active
approach to climate change and recognizing this as an opportunity to link our efforts to the sustainable growth of thecompany through contributions to society.
*carbon neutrality
An approach in which the amount of carbon dioxide that is emitted when something is produced or as a result of a series of humanactivities is balanced by the amount of carbon dioxide that is absorbed.

Process for Identifying Risks and Opportunities

Identification ofenvironmental aspects

Identification of
external and internal
issues that can affectan organization

Identification of theneeds and expectationsof interested parties

Compliance obligations(compliance with laws
and regulations)

Identification of risks and opportunities

Organizational issues tobe acted on

Needs and expectationsof interested parties tobe acted on

Additional complianceobligations

Discussion of approaches

Environment

Identification ofremarkableenvironmental aspects

Environmental action plans

Risks and opportunities to be acted on as part of ISO14001

Risk or opportunity

Remarkable environmental
aspects

1. Greenhouse gas emissions

Risk

2. Electricity use

Risk

3. Waste emissions

Risk

4. Recycling rates

Risk

1. Monitoring and complying with environmental laws and regulations

Opportunity

2. Increasing energy and waste collection and transportation/processing costs

Risk

3. Accelerating efforts for climate change

Opportunity

4. Contributing to power generation business using waste

Opportunity

1. Price increase of energy due to changing global circumstances such as COVID-19

Risk

2. Formulating medium and long-term Environmental Vision

Opportunity

3. Response to environmental risks(climate change, chemical substance contamination, etc.)

Opportunity

4. Complying with environmental laws and regulations

Opportunity

Organizational issues(external)

Needs and expectations ofinterested parties

57

Environmental Audit
The EMS Section, which is the department responsible for environmental management, carries out internal environmental audits once a year in all departments.
At NSK, in striving for the continuous improvement of our Environmental Management System, prevention of environmental accidents and disasters at work sites, and enhancement of the reliability of disclosed environmental data, eachdivision and work site confirms the suitability, compliance and effectiveness of their own Environmental Management
and reports the results to the management. In FY2022, we did not identify any instances of non-conformance.
Environmental audits of business partners are jointly carried out by the Procurement Department, the Production
Management Department and the EMS Section. “Environmental audits of business partners check sheets” are distributed to business partners in advance to verify the state of their environmental initiatives. We then narrow down
target areas to be audited, and carry out a combination of on-site and remote audits to check environmental burden
reduction activities, compliance with laws and regulations, and other aspects. In FY2022, we conducted environmental audits of business partners towards 13 companies (Suppliers: eight companies, Subcontractors: five companies),and confirmed that all of the identified corrections had been completed.
These environmental audits of business partners are also used as opportunities to share issues related to the promotionof environmental management and to provide education related to environmental laws and regulations. In FY2022, wefound that many business partners recognize the importance of initiatives toward realizing a decarbonized society
thanks to them demonstrating great interest in initiatives such as our activities toward carbon neutrality (calculationof greenhouse gas (GHG) emissions, selection and purchase of J-Credits, amount of solar power generated, etc.) andenergy conservation activities.
Number of Environmental Audits Carried Out
FY2019Internal audits
Environmental audits ofbusiness partners

FY2020

FY2021

FY20221

1

1

1

Suppliers

10

8

8

8

Subcontractors

6

5

5

5

At NSK, we carry out on-site inspection audits of industrial waste contractors (collection and transportation, andintermediate disposal sites) and external dangerous goods warehouse managers with whom we have concluded
contracts.

Environment

Other on-site inspection audits of industrial waste contractors and external dangerous goods warehouse managers

Through these inspection audits, we verify compliance with applicable laws and regulations, and suggest corrective
measures and recommend improvements where necessary. In FY2022, we carried out audits of ten industrial waste
contractors and three resource recovery plants, and found no points that required enhancement. As a result of thepersistent impact of variant strains of COVID-19, audits have been postponed to the following fiscal year for somebusiness partners in observance of measures to prevent infection followed by said business partners.

58

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 affects the evaluation of the management quality and, in turn, the evaluation of products.
At NSK, we are engaged in environment-friendly business operations; to this end, we acquired ISO14001 certification, the global standard environmental management system, in January 1999. We are implementing environmental
activities based on our management policy of reducing the environmental impact for the future global environmentand realizing a healthy and prosperous society in harmony with nature through all our business activities including research and development, manufacturing, sales, and service of dental medical equipment and other ultra-high-speed
rotary equipment.
We have adopted the Environmental Management System at each of our five business sites—our Headquarters and A1
Factories, and our Tokyo, Osaka and Chubu Sales Offices. In order to grasp states of progress and potential issues, andin order to strengthen our management activities at each of these business sites, we have integrated our environmental
activities and operate an efficient management system rooted in ISO14001. Through these activities, we categorize
business and environmental issues as “risks” or “opportunities,” and implement solutions aimed at their resolution. Our
approach conforms to ISO14001:2015.

Environmental Management System (EMS)
Applicable sites
Headquarters, A1 Factory, Tokyo Office, Osaka Officeand Chubu Sales OfficeInternal andexternal
problems

Scope
Applied to designing, manufacturing, sales, ancillary services
and marketing of the following products:

P

D

C

• Sterile burs
• Dental laboratory handpieces• Maintenance devices• Cosmetic devices• Industrial spindles• Industrial hand-held grinders• Environmental aspects• Legal and other requirements• Objectives, targets and action plans

Environment• Dental handpieces• Surgical handpieces• Ultrasonic scalers• Dental cleaners• Endodontic apex locators• Dental suction systems

Needs andexpectationsof interested
parties• Resources, roles, responsibility and authority• Competence, training and awareness• Communication• Emergency preparedness and response• Control of documents• Operation control• EMS documentation• Monitoring and measurement• Evaluation of compliance• Conformity as well as corrective and preventive action• Control of records• Internal auditsA• Management review

Intended results of the environmental management system (EMS)59

Targets and Results
Medium-term Plan: Green Plan 2030
At NSK, we have for a long time promoted environmental activities based on our medium-term plan, “Green Plan
2030.” The Green Plan 2030 defines our belief that, as the responsibility of a monozukuri company that consumes
large amounts of energy, we have an increasingly important role to play in solving environmental issues, and that weare dutybound to respond to the various needs and expectations of society. Our formulation of the Green Plan 2030 isrooted in an awareness that responding to society’s expectations in this way will help us execute our social responsibilities. At NSK, we intend to carry out a variety of initiatives aimed at reducing our impact on the environment, basedon our Green Plan 2030 medium-term plan.
Going forward, we expect that climate change reduction goals, initiatives and measures will be defined by various
countries. We will strive to continue to reduce our greenhouse gas emissions throughout the supply chain, paying
close attention to greenhouse gas reduction trends both in Tochigi Prefecture and in Japan as a whole. We did not review the Green Plan 2030, taking into consideration the status of activities by competitors and the results of activities
to reduce environmental impact in FY2022.
We started calculation of greenhouse gas emissions since FY2021 as a response to climate change that is a matter ofthe utmost importance for the company. From the result of the calculation of greenhouse gas emissions, we verify
our compliance with the GHG Protocol through a third-party organization for every fiscal year. Furthermore, basedon the results of this verification, we determined the reduction target of zero greenhouse gas emissions from ourbusiness activities (consumed by our company) at domestic production sites (Scope1 and Scope2) by FY2030. Ourbasic approach involves first developing an understanding of our company’s greenhouse gas emissions and thentaking independent actions in endeavoring to reduce these emissions, and managing emissions that are not possible
for us to reduce on our own through the introduction of renewable energy and utilization of the J-Credit Scheme*1.
As a result, we were able to achieve zero greenhouse gas emissions (Scope1 and Scope2) at our domestic production
sites in December 2021. We will continue to maintain zero emissions in FY2023 through the calculation of greenhousegas emissions for FY2022.
reduce greenhouse gas emissions in the entire supply chain, which includes considering measures that will lead to
reducing other indirect emissions (Scope3), visualizing greenhouse gas emissions throughout the lifecycle of individual products through the carbon footprint (CFP)*3, and expanding the scope of calculation of greenhouse gas
emissions including local subsidiaries. Furthermore, we shall consider activities that increase contributions toward

Environment

Going forward, through establishing a circular economy*2 (recycling-oriented economy), we shall look for how toclimate change, taking into account acquiring environmental initiative certification, while at the same time focusing
on revising the target again as necessary.
*1: J-Credit Scheme
Scheme under which the government certifies the amount of CO2 and other emissions reduced through efforts to introduce energy-saving devices and use renewable energy, as well as the amount of CO2, etc. absorbed through appropriate forest management,
as “credit.”*2: Circular economy
Recycling-oriented economic model; a system that emphasizes the principles of eliminating waste, circulating resources, and reducing and regenerating the burden on nature.
*3: Carbon footprint (CFP: Carbon Footprint of Products)
System for visualizing greenhouse gas emissions throughout the entire lifecycle of products and services from the procurement of
raw materials to disposal and/or recycling.

60

Green Plan 2030
Initiative

CombatingclimatechangeAim

Control
greenhousegas emissions

Management
items

Headquarters

A1

Calculated greenhousegas emissions
Scope1+2 (t-CO2)

Base
year

Target values

Base
value

2025

2019

2030

80%

100%

• Increase proportion ofrenewable energy used
• Introduction of J-Credit
Scheme• Introduction of Electric
Vehicles (EVs)

5%

10%

7%

15%

• Repair air loss
• Update aging facilities• Review automatic
air-conditioning controls
and operations• Optimize compressor
source pressures• Improvements to
productivity

20%

25%

• Optimize sorting
processes• Promote in-house
purification of floor
cleaning and in-processwaste fluid• Reduce food waste• Carefully implement the
3Rs

7,148

Reduce per unit CO2
emissions (Number of
shipments) (1,000 kL
per 1,000 units)
Reduce per unit CO2
emissions (production
units) (1,000 kL per
1,000 units)
Establishing a
recycling-oriented society

Control waste
emissionvolumes-2019
0.3997-2019
0.0513Per unit industrial
waste emissions(production units)(kg per 1,000 units)

2019

Concretemeasures55.88

Promote zero
emission

Resource recovery rate

99%

99%
or more99%
or moreResource recovery rate: 99%
or moreReduce foodloss

Food recycling rate

2020

30%

30%

• Standardize disposal
methods• Monitor canteen utilizationrate• Optimize food preparation
using past data

21,517

Promotegreen
procurementin supply
chainsContent of banned
substances (%)

-

0

0

• Regularly monitor laws
and regulations in various
countries• Ensure green procurement
across entire supply chain• Integrate management ofdata using chemSHERPA

Legal
compliance

Monitorapplicablelaws

Compliance rate withrelated laws

-

100%

100%

• Promote green procurement• Monitor domestic andoverseas environmental
laws and regulations

Preventing
environmental pollution

Plant effluent
standards

Compliance rate with
effluent standards

-

100%

100%

Trend management ofinspection data

Water usage

Water usage
surveys andreductions

Headquarters Factoryclean water-

A1 Factoryclean water-

A1 Factoryindustrial water-

A1 Factory
effluent water--

Monitoring andreductions (m3)Environment

Managementof chemical
substances

A1 Factory installation ofwater circulation tank61

Environmental Activity Results for FY2022
At NSK, we set—and work to achieve—annual environmental targets based on our Green Plan 2030 medium-term planand on the business issues we have categorized as “risks” or “opportunities.”
FY2022 are outlined below.
FY2022 targets

FY2022 results

Initiative

Reduction of
the amount ofgreenhouse gas
emissions

Promote carbon neutrality
by 2030

Realized carbon
neutrality from December 2022
(Scope1+2)• Calculated GHG emissions and received
third-party examination of validity• Installation of solar panels at the A1+• Introduction of J-Credit Scheme• Acquired PAS2060, an international standard
for carbon neutrality

Reducing per unit
energy use

Headquarters

Compared to
FY2019Per unit
reductionof 3%
0.3877 kL per
1,000 units

FY2022 results: 0.3974
kL per 1,000 units
Target achievement rate:
98%

A1

Compared to
FY2019Per unit
reductionof 3%
0.0497 kL per
1,000 units

FY2022 results: 0.0446
kL per 1,000 units
Target achievement rate:111%• Optimization of compressor pressures• All compressor operation stopped at nighttime
on weekdays and at weekends• Promote company-wide reductions in air loss
• Automatic air-conditioning control (air-conditioning systems stopped for six minutes at
random per 30 minutes of operation)• Switching to energy-saving air guns
• Stoppage of outside air conditioners

Promote zero
emission

Resource recovery rate of
99% or more

Industrial waste resource
recovery rate: 99.1%• On-site audits of 13 industrial waste collection
and transportation contractors• Careful sorting of industrial waste

Reducing waste
volumeCompared to FY2019
Per unit produced
reduction of 8%
Target value of 54.17kg
per 1,000 units

FY2022 results: 32.43 kg
per 1,000 units
Target achievement rate:140%• Proper sorting of industrial waste and generalwaste from business activities (waste plastic,
wood chips)• Promote recovery and recycling of in-process
cutting fluid• Utilize food waste for generating power

Strengthening
management ofchemical substances containedin productsContent free of banned/
managed substances:
100%

Banned substance-free:100%• Standardize attachments of results of investigations into chemical substances contained in
our products to specification sheets

Complying withenvironmental
laws and regulations

100% compliance

Exceeded BOD with A1
Factory septic tanks(300-person tanks)*Plant effluent water was
within specified values• There was an inflow of groundwater from theconstruction of the A1+ building, and water
quality was temporarily unstable. Currently
water quality has returned to a stable state

Assessment Criteria:= Achievement rate of 100%

Assessment

Environment

Initiative= Achievement rate of 90% or more

62

Combating Climate Change (Reduction of the Amount of Greenhouse Gas Emissions)Starting carbon neutrality (zero-CO2 monozukuri)! (Headquarters Factory and A1 Factory)
Since acquiring ISO14001 in 1999, NSK, a corporation that is globally active in the dental, surgical and industrial
business fields, has maintained a commitment to fostering the belief that companies are dutybound to fulfill their
responsibility to society and has thereby continued to promote initiatives to realize a sustainable society. Under thesecircumstances, from December 1, 2021, we began introducing initiatives to switch 100% of the electricity used at
Headquarters Factory and A1 Factory to renewable energy*1. We continued to accumulate initiatives to reduce greenhouse gas emissions, including installing solar panels at the A1+ building, updating aging equipment, and expanding
the scope of application for eco-friendly product packaging while calculating our greenhouse gas emissions every
fiscal year in accordance with the GHG Protocol and receiving third-party examination of our calculation’s validity.
Furthermore, as a result of receiving third-party verification, we successfully offset greenhouse gas emissions byutilizing carbon offsetting*2 provided under the J-Credit Scheme and achieved carbon neutrality under the GHG Protocol*3 Scope1 and 2*4 at the Headquarters and A1 Factories. In addition, we acquired confirmation from a third-party
organization that our company conforms with international standards based on specifications for the demonstrationof carbon neutrality (PAS 2060)*5 established by the British Standards Institution (BSI), and started our current operations in zero-CO2 monozukuri.
Going forward, while actively working to establish a circular economy (recycling-oriented economy) and visualize
greenhouse gas emissions throughout the lifecycle of individual products through the carbon footprint (CFP), we will
make progress on measures to reduce indirect greenhouse gas emissions (Scope3). We aim to be a company that
continues to carry out the best value exchange, including our environmental activities, with all stakeholders.
*1: 100% renewable energy
Energy readily available from renewable sources that can be used without emissions of the greenhouse gas that causes global warming.
*2: Carbon offsetting
Efforts to make up for emissions of greenhouse gas such as carbon dioxide (CO2) through contribution to reducing or absorbing*3: GHG Protocol
International standard for calculating and reporting greenhouse gas emissions.

Environment

emissions in other areas. “Carbon” refers to “CO2 (greenhouse gas)” and “offset” means “to make up for, to counter.”*4: Scope1 and 2“Scope1” refers to direct greenhouse gas emissions by the reporting company itself. “Scope2” refers to indirect emissions from theuse of energy (electricity, etc.) provided by others.
*5: PAS2060
Specifications for the demonstration of carbon neutrality created and issued by the BSI.

GHG Calculation Report

Third-party Assurance Report (PAS 2060)

63

Why strive for carbon neutrality?
In the modern day, global warming presents a common issue faced by the entire world. The warming of the Earth iscreating a major impact on all of our lives. This is not limited to humankind; present conditions are affecting various
forms of flora and fauna as well, threatening to shake the very foundations on which life on planet Earth depends forsurvival. As a countermeasure for the climate crisis, initiatives for carbon neutrality are being pushed forward aroundthe world. “Carbon neutrality” means to reduce overall greenhouse gas emissions to zero. In other words, this term refers to the process of countering the amount of greenhouse gas emissions by subtracting the amount that is absorbed
or removed to reach a sum total of zero.
While it may not be possible to achieve zero greenhouse gas emissions through business activities alone, they can atleast be reduced. Towards the realization of a decarbonized society, we set out a target of zero greenhouse gas emissions generated from our business activities by 2030, and are making continuous efforts to this end through initiatives
such as transitioning to renewable energy, increasing our own power generation ratio by installing solar panels, andutilizing J-Credits. Going forward, we will maintain our commitment to monozukuri at zero-CO2 factories throughgradually introducing electric vehicles, installing solar panels at the new M1 building of the Headquarters Factory, etc.,
in order to fulfill our responsibility to society.

Starting
zero-CO2
monozukuri!

Zero Carbon Drive refers to driving of any vehicle in which no carbon dioxide is emitted. This initiative was named byEnvironment

Developments in decarbonization to realize “Zero Carbon Drive”
the Ministry of the Environment in reference to driving that produces zero greenhouse gas emissions through combining the use of electricity generated from renewable energy sources such as solar and wind power together withelectric vehicles (EV), plug-in hybrid vehicles (PHEV), and fuel cell vehicles (FCV).
From FY2023, NSK plans to gradually replace our company vehicles with electric vehicles (EVs). Together with theelectricity generated from 100% renewable energy that we have already procured, we will be able to reduce greenhouse gas emissions during transit to zero and thereby achieve Zero Carbon Driving.

Recharging with renewable energy

64State of Environmental Impact of Business Activities
At NSK, we carry out processing and assembly at our production sites and each product is provided to market. We
monitor the outline of the environmental burden in the entire supply chain, such as the consumption of resources
generated from all business activities, CO2 emissions, and waste generation. At the same time, we utilize them toreduce the environmental burden.
Material Balance (2022)

Focused on reduction in use ofhazardous chemical substances
included in the products andmaterials.
Promoted energy saving initiatives
through raising employees'
environmental awareness.
(FY2022 results)

Promote zero emission
Unit energy consumption
Reducing use of chemical
substances(FY2022 results)

Development

Raw materials
Metallic materialuse(Units)

Per unit energy use (Headquarters)kL per 1,000 units

200,765

Per unit energy use (A1)

Chemical substances
Cutting fluids(L)35,600Cleaning fluids(L)21,6000.3974kL per 1,000 units

0.0446

Emissions volumes

Procurement

Energy(Headquarters)

Emissions into
atmosphere(kg)7.9Electricity(1,000 kw)

4,843

Emissions into
public water(kg)

0.0

LPG(m3)

5,976

Emissions
into soil(kg)

0.0

Input

Energy(A1)12,426

LPG(m3)

5,026

2,688

Clean water(Headquarters)
m3

8.5

Sewage(kg)0.0Manufacturing

Paper Purchase Amount
Purchase Amount(A4 size equivalent)

Transfer amount
Wast(kg)

Waste
Industrial waste
emissions(kg)101,654

Landfill volume(kg)900

Environment

Electricity(1,000 kw)

OutputWastewater from the factory(A1)10,768m3

14,492

Clean water(A1)
m3

6,501

Industrial water(A1)
m3

8,835

Distribution
Sales

Gasoline,light oil(Headquarters,A1)
Total of 10 units(L)11,36765

Initiatives
Compliance with Environmental Laws and Regulations
As global warming, resource energy, and other global environmental issues are becoming more widespread and globalized, policies and regulations are being reviewed and strengthened at the regional and national levels with the aimof achieving sustainable growth.
At NSK, we ensure careful environmental compliance with the aim of minimizing environmental risks such as environmental pollution, destruction of ecosystems and climate change. In FY2022, while constructing the new A1+ as anaddition within the A1 Factory, groundwater produced in the construction process was accidentally allowed to flow
into the septic tank channel, and as a result, water quality in the A1 Factory septic tanks was temporary unstable andBiological Oxygen Demand (BOD) exceeded the standard at outlets of septic tanks. We conducted corrective action
and the water quality became stable.
In addition, as we start operations of the A1+ building, we have been working to ensure our compliance with relevantlaws and regulations, including the submission of notification on our status as a dangerous goods warehouse under
the Fire Service Act, the submission of other notifications under the Noise Regulation Act and the Vibration Regulation Act, and labeling obligations accompanying the additional construction of industrial waste storage facilities. In
FY2023, with the revision of legislation such as the Act on the Rational Use of Energy and the Industrial Safety and
Health Act, we will strive to maintain an accurate understanding of the relevant regulations and ensure that we are in
full compliance in response.

Environmental Education
Raising environmental awareness of each employee is important for promoting
environmental conservation activities. Therefore, we believe that it is important toenhance the education system and implement continuous education.
At NSK, the Environmental Control Manager and EMS Section work together to carryout various educational programs. Through general environmental education proand various work processes impact the environment; we also implement specialized
education programs for relevant departments, aimed at raising awareness of the latest trends in environmental laws and regulations, including those covering chemical
substances.

Environment

grams, we seek to deepen employee understanding of how environmental activities

In addition, when elementary school children take part in plant tours, we teach them
about recent environmental issues, the environmental activities we carry out at NSK,
as well as environmental initiatives that can be carried out by individuals.
At NSK, we carry out monozukuri activities in regions with rich natural environments.
We believe it is our corporate duty to pass these natural environments down to future
generations, and we implement initiatives accordingly.
In FY2022, we stopped accepting plant tours due to the spread of COVID-19. However, from FY2023 and onward, socioeconomic activities like this are also expected togradually head toward recovery with the legal status of COVID-19 being reclassified
from an “infectious diseases such as novel influenza” to a “Class 5 infectious disease”
under the Infectious Disease Act. Going forward, we shall start accepting plant tours
again, taking into account the infection circumstances.

66

Controlling Climate Change
Basic Approach
Climate change, which stems from increased greenhouse gas emissions, is leading to natural disasters such as torrential
rain occurring with increasing frequency across the world. Against such a backdrop, the Paris Agreement was adopted
at the International Conference COP21 of the United Nations Framework Convention on Climate Change (UNFCCC),
and the movement toward decarbonization is accelerating in Japan and overseas. Besides, climate change is a sharedglobal and social issue that is the most urgent and important. Extreme disasters which are caused by climate change
may have major impact on not only people’s lives but also on business management directly and indirectly. Companies
are expected to understand the risks and opportunities posed by climate change to their businesses; it is also hopedthat local communities, companies and the entire world will work together to resolve environmental issues.
NSK’s energy consumption exceeds the equivalent of 1,500 kL of crude oil, and so it is recognized as a Specified Business Operator under the Act on the Rational Use of Energy.
We are a company that consumes large amounts of energy, and our business activities therefore have some bearing on
environmental issues. At NSK, we have defined “coexistence between people and the earth” as one of our goals andcarry out our activities as a member of society accordingly. We recognize that using the monozukuri (manufacturing)expertise and advanced technological capabilities we have accumulated to demonstrate solutions to issues related to
global warming is both a need and an expectation of society.
In order to respond to these expectations, we seek to accurately grasp the risks posed by climate change, and work to
reduce greenhouse gas emissions in our production processes. At the same time, we intend to work on the basis that
expanding sales of environmentally friendly products is an opportunity for creating new business and, by reducing
climate change-related risks, fulfill our social responsibility for realizing the Paris Agreement.
For this reason, all our employees will possess high environmental awareness, our supply chain will work together tolems.

Environment

achieve the Green Plan 2030 and, as an industrial leader, we will contribute to the resolution of environmental prob-

67

Important issues toward climate change
In the Paris Agreement of 2015, as a world-wide concern, a shared long-term goal to limit the increase in global averagetemperature well below 2˚C (WB2˚C goal), compared to pre-industrial levels was determined. For realizing this WB2˚C
goal and NSK’s long-term vision 2030, we determined the reduction targets of greenhouse gas emissions from ourbusiness activities (consumed by our company) (Scope1 and Scope2). We shall consider the feasibility of the reduction targets of greenhouse gas emissions in line with the 1.5˚C scenario, taking into account acquiring environmental
initiative certification.
Since FY2021, we have been visualizing our greenhouse gas emissions with a focus on our domestic production sites
which have large energy consumption, and have started reduction activities by setting targets in our Green Plan 2030
medium-term plan toward Scope1 and Scope2 in advance. In FY2022, we offset our greenhouse gas emissions for themonth of December 2021, when we started our introduction of renewable energy, with carbon offsetting provided by
the J-Credit Scheme. We were also verified by a third-party certification body as being in compliance with PAS 2060,
an internationally applicable standard for the demonstration of carbon neutrality.
In addition, from the result of the calculation of these greenhouse gas emissions, the large number of emissions areat the raw materials procurement level and sold product usage level. Accordingly, we recognized that reduction
initiatives for environmental burdens when customers use our products (improve the energy efficiency of products)
and our business activities (production) are important issues toward climate change. Going forward, through efforts
such as establishing a circular economy (recycling-oriented economy) and visualizing greenhouse gas emissions by
individual product through the carbon footprint (CFP), we shall continue to examine how to reduce greenhouse gas
emissions in the entire supply chain.
Greenhouse gas emission calculation category in all business activities
Explanation

Contents

Scope1

Direct greenhouse gas emissions by the reporting company itself.
(e.g., fuel combustion, industry process)

Fuel combustion

Scope2

Indirect emissions from the use of electricity, heat, or steam supplied by others.

Fuel usage

Scope3

Indirect emissions other than Scope1 and Scope2(Emissions by others related to the company’s activities).

Raw materials/ Commuting/ Transportationand delivery/ Usage and waste/ Other

Scope3 Category
Calculation
category

Category

Activities

C1

Purchased goods and services

Procurement of raw materials, parts, and containers

C2

Capital goods

Construction of production facilities

C3

Fuels and energy-related activities notincluded in Scope1 or Scope2

Upstream of purchased fuels and purchased electricity, etc.

C4

Upstream transport and delivery

Transportation and distribution of products and services purchased by thereporting company, third-party transportation and distribution purchased by thereporting company

C5

Waste generated in operations

Processing of waste

C6

Business travel

Business travel by employees

C7

Employee commuting

Employee commuting

C8

Leased assets (upstream)

Assets leased to the reporting company

C9Downstream transportation and delivery

Transportation and distribution of products sold by the reporting company

C10

Processing of sold products

Processing of intermediate products sold by the reporting company

C11

Use of sold products

Use of products by users

C12

End-of-life treatment of sold products

Processing of products upon disposal by users

C13

Downstream leased assets

Assets leased to other entities by the reporting company

C14Franchises

Franchises’ activities of Scope1 and Scope2

C15

Investments

Stock investment

Environment

Calculation
category

68

Our approach to reduce greenhouse gas emissions
At NSK, we identify the amount of greenhouse gas emissions by the total amount of emissions in various categories
mainly in domestic production sites, not only of our company’s emissions but also all related emissions from our business activities. All related emissions from our business activities are the amount of greenhouse gas emissions which
are produced from the entire supply chain, such as the procurement of raw materials, manufacturing, transportation,
sales, and disposal, etc.
We are working on procurement of renewable energy and expanding our own power generation ratio so that we
reduce greenhouse gas emissions from our business activities (consumed by our company) (Scope1, Scope2). In
addition, we reduce greenhouse gas emissions that cannot be reduced through corporate efforts by countering themthrough the use of carbon offsetting.
For other indirect emissions (Scope3), we shall consider measures to realize business growth and improve corporate
and brand value by providing environmentally friendly products and services and gaining empathy from customers
and business partners.

Our power plants

Procurement of
renewable energy

Carbon offsetting
CO2 emissions

Activities
to promoteenergysaving

Solar and wind
power, etc.

SupportCreditSolar power

Planting trees
and forests

Environment

Achieve carbon neutrality as verified by third-party organization

Solar and wind
power, etc.

69Total emissions at domestic production sites and sales offices
Scope1 and Scope2
ton-CO2
8,000

7,174

7,000
5,848

6,000
5,000
4,000

7,041

Significantly reduced Scope 2 withprocurement of renewable energy(zero emissions at Headquarters
Factory and A1 Factory)

5,712

3,000
2,000
1,000
0

136

133
2020

136
2021

Scope1

191

55

2022

Scope2

Scope3
ton-CO2
100,000

88,07580,00058,02260,00041,249Environment

40,00020,000

0

2020

2021

2022

70

Realization of carbon neutrality at domestic production sites (achieved zero Scope1 and Scope2 emissions)
Since FY2019, NSK has been working on quantifying the amount of greenhouse gas emissions generated from ourbusiness activities companywide in accordance with the GHG Protocol.
Within greenhouse gas emissions of Scope1 and Scope2, most is the result of energy consumed by our company
classified as Scope2 (indirect emissions from the use of electricity, heat, or steam supplied by others). From December 2021, our domestic production sites (Headquarters Factory and A1 Factory) started to procure renewable energy,
enabling us to achieve zero Scope2 emissions in FY2022.
In addition, we offset our Scope1 emissions by introducing carbon offsetting provided by the J-Credit Scheme tocoincide with the start of efforts to procure renewable energy.
In FY2023, we will continue to use the result of the calculation of GHG emissions from FY2022 in carbon offsetting for
Scope1 greenhouse gas in order to maintain zero emissions.
Total emissions at domestic production sites (Scope1 and 2)
ton-CO2
8,000

7,088

7,039
7,000
5,760

6,000

Significantly reduced Scope 2 withprocurement of renewable energy(zero emissions at Headquarters
Factory and A1 Factory)

5,000
4,000

6,992

6,894

3,000

5,662

2,000
1,000
0

145

98
2019

96
2020

98
2021

98

0

2022

The EMS Section, as the secretariat of energy-saving of the company, monitors our whole organization in a cross-departmental manner and considers measures for reducing greenhouse gas emissions and shares actual activities,

Environment

Initiatives to reduce emissions in Scope1, 2

which increases viability to realize the Green Plan 2030.
In FY2022, we introduced carbon offsetting provided by the J-Credit Scheme, and achieved carbon neutrality at the
Headquarters Factory and the A1 Factory by reducing all greenhouse gas emissions to zero. In order to certify thisachievement, we received third-party verification of our compliance with PAS 2060, an internationally applicablestandard for the demonstration of carbon neutrality.
<Key Initiatives>• Monitor energy consumption from our business activities• Reduce greenhouse gas emissions in productivity improvement• Reduce greenhouse gas emissions by expanding the renewable energy ratio• Reduce fuel consumption by transitioning to electric vehicles• Acquire PAS 2060 certification

71

Promotion of carbon offsetting provided by J-Credit
NSK uses J-Credits for carbon offsetting in relation to Scope1 emissions determined from the result of the calculationof greenhouse gas emissions.
Under the J-Credit Scheme, the government certifies the amount of greenhouse gas emissions reduced throughefforts to introduce energy-saving devices and use renewable energy, as well as the amount of greenhouse gas
absorbed through appropriate forest management, as “credit.” This scheme first involves companies and/or local
governments, etc. conducting plans to reduce or absorb greenhouse gas emissions by installing renewable energy
generation facilities, operating afforestation projects, or similar efforts. These organizations then compose reportson their projects and the amount of greenhouse gas emissions that will be reduced or absorbed, and register theirproject with the government. The government carefully examines the content of the project, and upon verifying thatthe expected amount of greenhouse gas emissions has been reduced or absorbed as registered, can issue J-Credits
based on the amount of greenhouse gas emissions that were reduced or absorbed. Organizations that have received
verification from the government are then able to sell the issued J-Credits to other companies, etc. through official
auctions, bilateral negotiations, or through intermediary services. In other words, the J-Credit Scheme allows us tovisualize the intangible value of the amount of greenhouse gas that has been reduced or absorbed as credits in accordance with a system of validation under the standards of the national government, and make them available for saleand purchase.
We are committed to actively utilizing schemes operated by the government in this manner as we work to respond toclimate change. In addition, as we develop business activities that are rooted in a local region (Kanuma, Tochigi Prefecture), we have made the decision to purchase credits from companies that actively contribute to local environmental
conservation, maintain company-owned forests, and promote mountain forest development activities that can be
expected to reduce and absorb greenhouse gas in a long-term and stable manner.
Going forward, we will prioritize procurement from companies that actively contribute to local environmental conservation and continue to help preserve the natural environment in local regions.
Implementation of projects that reduce emissions or increase absorption of greenhouse gas

Producers of J-Credits

Amount of CO2, etc. emissions reduced/absorbed(J-Credits)
Sales of
J-Credits

Circulation of funds

Environment

Small and medium enterprises, farmers, forest owners, local governments, etc.

Funds

Target achievement, CSR activities
Carbon offsetting

Purchasers of J-Credits

Large enterprises, small and medium enterprises, local governments, etc.
• Utilization in CDP/SBT• Achievement of RE100 targets• Reports for Act on Promotion of Global Warming Countermeasures, Act on the
Rational Use of Energy• Carbon offsetting• SHIFT business• ASSET business• Achievement of targets for Keidanren Carbon Action Plan

72

Introduction of renewable energy
NSK’s Headquarters Factory and A1 Factory have continued to procure renewableenergy since December 2021, allowing us to reach zero Scope2 emissions in FY2022.
In FY2022, the total amount of Scope1 and Scope2 greenhouse gas emissions companywide (Headquarters Factory, A1 Factory, Tokyo Office, Osaka Office and Chubu Sales
Office combined) was 191 tons of CO2, a significant reduction in emissions from that ofthe previous fiscal year.

Installation of solar panels to the new buildings (A1+ building) at A1 Factory
We shall install 1,600 solar panels on the entire roof of the A1+ (Total
floor area: 5,500m3) which commences operation in September
2022. These solar panels will generate a total of 620 kW of electricity, and all of the generated power will be used within the A1 Factory.
In addition, we plan to install solar panels on the new M1 building
at the Headquarters Factory scheduled to begin construction in
FY2023, and we strive to continuously expand the renewable energy ratio through our own power generation.

Reducing Scope3 greenhouse gas emissions
We have seen an annual increase in Scope3 emissions by category every year since FY2021. When viewing emissions
from our business activities by category, there is a strong tendency toward the raw materials procurement level (CatHowever, in FY2022, we actively installed equipment to improve productivity at the new A1+ building, and emissions
from the procurement of capital goods (Category 2) increased significantly compared with the previous year.
In addition, as raw materials and other procurement costs are increasing due to the impact of COVID-19 and theRussian invasion of Ukraine, and as a result of increasingly accurate calculations from including items such as officeEnvironment

egory 1) and the sold product usage level (Category 11).

supplies, etc. not directly related to production, we are able to confirm that emissions at the raw material procurementlevel (Category 1) have increased by 58% year on year.
At the same time, we have for a long time been replacing the packaging of products by transiting from plastic topaper (eco-friendly packaging). This transition to paper has resulted in a reduction in emissions from the end-of-life
treatment of sold products (Category 12) by 6% year on year. Going forward, we will consider the future direction of
initiatives to reduce Scope3 emissions in consultation with the relevant departments.

73

Emissions by fiscal year
ton-CO2
100,000

88,07590,000Category12
6% reduction fromthe previous year

80,00070,00058,02260,00048,33850,00041,24940,00030,000Category1
58% increase fromthe previous year.

20,00010,000
0

2019

C1

C2

2020

C3

C4

2021

C5

C6

Category3
1.4%
Category12 2.0%
Category2 13.6%

Category4
11.4%

2022

C7

C11

C12

Category7 0.7%
Category6 0.2%
Category5 0.1%

Category1
53.7%

Environment

Category11
16.9%

Participation in global initiatives, etc.
NSK consider participating in environmental initiatives including Science Based Targets (SBT) initiatives in order toensure efforts for climate change. We consider acquiring certification as a goal based on scientific evidence adheringto the Paris Agreement by quantifying the amount of greenhouse gas emissions globally including local subsidiaries,
setting the reduction target of greenhouse gas emissions, and submitting it to the organizer of environmental initiatives. Regular disclosure of concrete progress of activities are also planned.
We shall continue to work on business growth providing environmentally friendly products and services and realizing
to improve corporate value, and gaining empathy with stakeholders.
GHG reduction targets for each Scope category
Scope category

Reduction targets Matching with the Green Plan 2030

Scope1 and Scope2

Reduce by 80% compared to FY2019 by FY2025
Reduce by 100% compared to FY2019 by FY2030

74

Climate Change Action Policy
In recent years, climate change has become a major business management risk. At NSK, we believe that accurately
assessing the risks and opportunities provided by climate change and actively disclosing our Climate Change Action
Policy to our stakeholders is necessary for our company to grow in a sustainable manner.
Activities

Progress in FY2022

Governance• Deliberate progress management and investment decisions
related to decarbonization as climate change is a matter of theutmost importance for the company• Deliberate progress toward the target based on the Green Plan
2030 and review our medium-term plan
• Report results of environmental activities including climatechange to our President and Group CEO who has ultimate
responsibility once a year. Deliberate other various strategies, if
necessary, with the President and Group CEO and other members• Report results of initiatives related to climate change
and propose strategies in the ISO14001 management
review-C alculate greenhouse gas (GHG) emissions andmaintain third-party verification- Decide not to make revisions to the Green Plan 2030
- Encourage realization of carbon neutrality• Decide to set scope to include domestic production
sites• Consider measures to reduce Scope1 emissions→Utilize carbon offsetting• Introduce third-party verification of compliance withinternational standards on carbon neutrality

Strategies• Identify risks and opportunity by scenario analysis including not
only 2˚C scenario but also 4˚C scenario• Set “Response to climate change and contribution to a recycling-oriented society” as one of the materialities of the company• Expand initiatives, not only the current power savings, but also
reduction of greenhouse gas emissions as climate change is theglobal environmental issue→Reflect them in the Green Plan 2030
• Promote energy saving such as transition away from the use offossil fuel-based resources, improve the energy efficiency of our
production systems and our products, as we are a monozukuri
company. As such, if we do not implement any improvements,
then we expose ourselves to the risk of rising capital investment
and other costs, and we may also miss out on business opportunities.Examples: repairing air leaks, optimizing compressor air
supply pressures, etc.

• Conduct calculation of greenhouse gas emissions as
of FY2022 (the baseline fiscal year) and third-party
examination of calculation validity• Continue 100% renewable energy (Headquarters
Factory and A1 Factory)• Start our own power generation using solar panels
installed at A1+ building (1,600 solar panels generating
620 kW of electricity)• Contribute to biomass power generation using foodwastes (Participation in activities in both the public andprivate sectors)• Start discussing toward acquiring environmental
initiatives• Hold a workshop in a cross-departmental manner (BCP)→Consider risks and training simulating natural
disasters
Start to consider electric vehicle utilization during
emergencies (gradually introduce electric vehicles andcharging stations)

RiskManagement• Based on the concepts outlined in ISO14001:2015, identify
risks and opportunities annually with the potential to impact ourbusiness activities in a manner that exceeds merely an environmental framework. Examples include “external and internal issues
that can affect an organization” and “the needs and expectationsof interested parties.”• Energy costs are rising with the increase of raw materials.
Refraining from concluding new contracts with retail electricity
suppliers→Energy costs have increased due to the transition to 100%
renewable energy. Evaluate selection of retail electricity
suppliers on a once per year basis• Regular equipment inspections and fire drills• Hold drills based on the business continuity plan (BCP)• Conduct reduction initiatives for climate change• Strong tendency toward refraining from concluding
new contracts at retail electricity suppliers. Goingforward, select retail electricity suppliers by comparing
electricity costs and identifying power supply methods(solar/wind, etc.)

Indicesand Targets• The amount of greenhouse gas emissions from business activitiesReduction of Scope1 and Scope2
FY2030 Targets
Scope1+2: Reduce by 100% (Compared to FY2019)• Reduction of the amount of greenhouse gas emissions in theentire supply chain• FY2022 results- Scope1+2: 191t-CO2- Amount of greenhouse gas emission of Scope2 in the
Headquarters Factory and A1 Factory reduced to zeroby substituting electricity with renewable energy inDecember 2021
• The amount of greenhouse gas emissions in the entire
supply chain Start discussing reduction targets andinitiatives

Environment

Item

Governance / System
Currently, including the status of our response to climate change, we operate our system as part of our energy saving
efforts for ISO14001.
While maintaining ISO14001, we identify “risks” and “opportunities” based on an analysis of our organization’s current
state, and report these factors, and strategies for addressing them, to our President and Group CEO.
Going forward, climate-related issues could pose a significant risk to our business management, with potential impact
on our business caused by climate change and the formulation of medium to long-term strategies and reviews of theirimplementation, and we will work to make considerations for systems and activities to ensure that these issues areappropriately managed.

75

Strategies
At NSK, we formulated the Green Plan 2030, and we are working on reducing by 100% (vs. 2019) the greenhouse gas
emissions (carbon neutral) which are consumed by our company in domestic sites by FY2030 in addition to former
energy saving initiatives.
Among risks related to climate change, there are two types of risks: transition resulted from such as strengthening
regulations and technical progress generated on the way to decarbonized economy and change in market, physicalchange resulted from acute abnormal weather and continuing temperature rise accompanied with global warming
accelerates. Meanwhile, related to create energy saving products, “efficient use of resources” related to efficient useof resources in plant operation are in the opportunities.
We recognize the relationships between our business activities and risks and opportunities.
Our business risk
Kind

2˚C scenario Transitional change
PolicyRegulations

Long-term

Medium-term

Risks• Most of greenhouse gas emissions are generated domesticallybecause our monozukuri activities are domestic• We predict that energy regulation will be accelerated due tothe increasing reduction of greenhouse gas in response to theParis Agreement• Global market trend shifts to renewable energy procurement.
Accordingly, shutdowns of thermal power plants, increasing
costs of oil, coal, and LNG for power generating starting
materials will occur, resulting increased energy costs andstopping new contracts• An increasing number of companies are considering transition
to 1.5˚C scenario, since, in the Paris Agreement, the sharedlong-term goal to limit the increase in global average temperature well below 2˚C (WB2˚C goal), compared to pre-industrial
levels was determined• Capital investment for our own power plants such as solar
power.
• Change in energy cost due to increasing materials cost

• Accelerated initiatives to improve productivity such as
improvement of production process and high-efficiency
equipment toward the reduction of greenhouse gas emissionsin production sites• In FY2022, introduced high-efficiency equipment andhardware improvement such as repairing air loss, andconducted software improvement and reviewed extraº energy
consumption such as operation efficiency• Ahead of competitors, started procurement of electricity
generated from solar and wind power (Headquarters Factoryand A1 Factory)• Introduced carbon offsetting using J-Credit Scheme→Offset Scope1 emissions• Continued calculation of the amount of greenhouse gas
emissions• Coal, oil, and LNG costs increased due to COVID-19 which isspreading all over the world• Consider infrastructure to increase our power generation
ratio of renewable energy in order to minimize influence ofchanging prices due to changing global circumstances• Installed 1,600 solar panels into the A1+ building which
commenced operation in September 2022. Generated
electricity consumed by our company• Plan to install solar panels into the new M1 building at the
Headquarters Factory (operation to commence in 2024)• Plan to gradually replace current vehicles with electric vehicles

Response

Kind
Time

Risks

Response

4˚C scenario Physical change
AcuteEnvironment

Time

Chronic

Medium-termLong-term• Larger typhoons and increased rainfall disasters shall have
impact on us and suppliers• There is a possibility of shutdown of operations or employee’s
lives when natural disasters occur, because the location of ourCompany is subject to suffer from flood damage and frequent
earthquakes• Profits will decrease if our plants stop operation and costs will
increase due to recovery costs and delivery delays• The sea level rise due to continuing global warming. Impact on
our company and suppliers shall increase• In preparation for apparent physical risks, rapid businessrecovery and prevention of disasters are essential• At NSK, we formulate, maintain, and improve the business
continuity plan (BCP) based on BCP, preparing for the damageof production sites and employees due to natural disasters
Decentralize production sites to lower risks• In FY2022, no disasters occurred which stopped importantbusiness operations• Hold drills based on the business continuity plan (BCP) in
preparation of natural disaster76

Business opportunities in our company
Kind

Timeframe

Opportunities

Response

EnergyLong
term• Transition to renewable energy• Improve social evaluation by the transition to
decarbonization• Transition to renewable energy→Promote procurement of renewable energy andintroduction of our own power plants• Calculation of the amount of greenhouse gas emissions• Introduced carbon offsetting using J-Credit Scheme• Maintenance of PAS 2060, an internationally applicablestandard for demonstration of carbon neutrality

Efficientuse ofresources

Long
term

• Aim for our business activities to be carbon neutral
toward 2030. Focus on reduction of energy
consumption through energy saving operation in
production sites• Cost reduction by resource efficiency in direct
operations• Monitor extra energy consumption by replacement ofold facilities to high-efficiency facilities and utilizing
energy saving diagnosis in production sites• Reduced energy consumption by improving production
process, repairing air loss, and introducing high-efficiency facilities• Expanding our own power generation ratio

Products
andServices

Long
term

• Improve product value and expand profit bycreating energy saving products which contributeto climate change mitigation and establishment ofdecarbonized society• Promote creation of energy-efficient products whichhave high environmental performance thanks to
productivity improvements such as low-consumption,common parts, and reduced size
• Created the “Z990/Z890,” with more power andimproved functionality, cutting ability, and durability• Created “M micro,” which realized reduced head size andhigh efficiency

Markets

Mediumterm• Increase evaluation and expectation from themarket by providing environmentally friendly
products into market• Enhance marketing methods including web information• Brand image innovation utilizing animation movies (NSKSTUDIO)

Resilience

Short
term

• Increase customer confidence with stable supply
even during natural disasters• Establish the business continuity plan (BCP) anddecentralize production sites to lower risks whendisaster occur

Risk Management
Following the adoption of the Paris Agreement, the movement toward decarbonization is accelerating in Japan andoverseas. Nevertheless, there is a danger that climate change will increase in severity and have a considerable impact
across the world.
climate change, there will be significant risks to our business continuity, including cost increases, the loss of business
opportunities and the onset of natural disasters. However, we also believe that we can create business opportunities
by being among the first to take action.
One example is improving the utilization rate of our production facilities. If we can actively use employee feedback

Environment

NSK carries out monozukuri activities in regions with rich natural environments. Unless we take measures to combat

from everyday monozukuri work to improve productivity, we will be able to reduce our per unit CO2 emissions, andresult in significantly reducing our greenhouse gas emissions.
In addition, decentralizing our production sites to avoid climate change risks can also be taken as a business continuity
opportunity. An example of this is our A1 Factory. At NSK, we previously carried out all processes from metal processing to assembly and delivery at our Headquarters Factory. However, we built A1 Factory, a dedicated metal processing
site, in the neighboring Utsunomiya Nishi Chukaku Industrial Park, and commenced operations there in FY2018.
Indicator and target
At NSK, we calculate the amount of greenhouse gas emissions generated from domestic production sites. In addition,
we are working on initiatives to reduce greenhouse gas emissions of Scope1 and Scope2, setting 2030 as the target
year. For greenhouse gas emissions in Scope1 and Scope2, we aim to realize “carbon neutral” by 2030 compared to
FY2019, by promoting introduction of renewable energy and efficient usage of energy in operation. Besides, for otherindirect emissions (Scope3), more than about 70% of greenhouse gas emissions in Scope3 for the Company are usageof purchased goods and services (category 1) and sold products (category 11). We shall consider concrete reduction
initiatives, further providing environmentally friendly products in the market, and promoting active production innovations.
The amount of energy we use including local subsidiaries shall be confirmed, taking into account acquiring environmental initiative certification in the future. We shall consider reduction initiatives of other indirect greenhouse gas
emissions outside of our business activities (Scope3).

77

GHG reduction targets for each Scope category
Scope category

Reduction targets Matching with the Green Plan 2030

Scope1 and Scope2

Reduce by 80% compared to FY2019 by FY2025
Reduce by 100% compared to FY2019 by FY2030

Response to the Act on the Rational Use of Energy and the Act on Promotionof Global Warming Countermeasures
In Japan, the Act on the Rational Use of Energy and the Act on Promotion of Global Warming Countermeasures requirecompanies that use more than a certain amount of energy, or emit more than a certain volume of greenhouse gases,
to report their energy usage and greenhouse gas emissions. The Act on the Rational Use of Energy requires thesecompanies to target, in the medium and long-term, on average an annual 1% reduction in per unit energy consumption, or its equivalent when taking electricity demand leveling into account. However, reductions in greenhouse gas
emissions rely fundamentally on voluntary initiatives; for this reason, under the Act on Promotion of Global WarmingCountermeasures, it is important not only to implement energy savings, but also to transition to the use of fuels withlow emissions factors in order to realize decarbonization.
NSK is a Specified Business Operator under the Act on the Rational Use of Energy. For this reason, we are working toachieve on average an annual 1% reduction in per unit energy consumption in the medium and long-term, and we regularly report the results of our initiatives to the relevant administrative bodies. In the Business Operator Classification
System, we have been ranked highly due to the results of our improvement initiatives.
*Business Operator Classification System under the Act on the Rational Use of Energy
All business operators that submit regular reports under the Act on the Rational Use of Energy are classified into 4 classes (S, A, B, andC), and implement various responses according to that class. S-class business operators are announced on the Ministry of Economy,
Trade and Industry’s website as “excellent business operators.”

Japan: 11,932 companies
The number of companies with “S class” evaluation four years running: 2,818 companies (approximately 24%)
Tochigi prefecture: 172 companies
The number of companies with “S class” evaluation four years running: 36 companies (approximately 21%)

Environment

Target companies for Business Operator Classification System

Response to the Act on Rational Use and Proper Management of Fluorocarbons
The Act on Rational Use and Proper Management of Fluorocarbons came into effect in April 2015.
As a result, NSK identified all devices that contain fluorocarbons, regularly calculates fluorocarbon leakage quantities
and carries out simple inspections, and thereby works to control the generation of greenhouse gases from fluorocarbon leaks. In FY2022, we found no fluorocarbon leakage quantities.

78

Company-wide Initiatives
Climate change due to global warming has various impacts on human life and natural ecosystems. Society as a wholemust use both energy and resources more efficiently to prevent environmental problems from growing more serious.
Similarly, when it comes to reducing environmental burden, there are limits to what a single company acting alone canachieve. Instead, it is vital that the entire supply chain increases its efforts to protect the global environment.
NSK has been striving to reduce its per unit energy use. In FY2022, we worked toward promoting energy conservation
with the target of a 3% reduction compared to 2019 at both the Headquarters Factory and the A1 Factory. Specificinitiatives have included continued efficiency improvements in our production processes with the goal of improving
productivity, and planned switches to the use of highly efficient facilities in addition to repairing air leaks in production
processes. Also, we have started initiatives to exchange information with particular suppliers with regard to energy
conservation activities that we are working toward together.
Furthermore, we require delivery vehicles to not idle their engines and to abide by company speed restrictions. We
also verify the state of and request cooperation with regard to energy conservation initiatives when we carry out
environmental audits of business partners.
Going forward, in line with our Green Plan 2030, we intend to set even loftier targets, and all our employees will work
together to achieve them.
Greenhouse Gas Emissions Per Unit (Headquarter)
kL
5,000

kL/1,000units
0.46

0.44204,000

0.43
0.39970.3975

3,000

0.40

0.3711
2,000

0.37
1,197

1,188

1,000

0

0.34

2019

2020

Emissions

2021

2022

0.31

Per unit

Environment

1,108

1,246

Greenhouse Gas Emissions Per Unit (A1 Factory)
kL
5,000

kL/1,000units
0.06
0.05130.04774,000

0.0422
3,000

2,884

2,565

0.0446
3,196

0.05

0.04

2,924

2,000

0.03

1,000

0.02

0

2019

2020

Emissions

2021

2022

0.01

Per unit

79

Key Initiatives
Improvements to productivity

Improved yields, automation, optimized production spaces, reduced working hours

Optimizations of facility operating hours

Machines switched off when non-operational, reduced standby power consumption

Review of air-conditioning use

Optimized temperature settings, optimized operational hours, intermittent operation based on
automated temperature control, partitioning of spaces

Energy savings at production facilities

Transition to high-efficiency equipment, updates to ageing equipment

Energy savings from air-conditioning

Regular equipment replacements, regular filter cleaning

Energy savings from lighting

Transition to high-efficiency lighting, introduction of motion sensors, transition to fewer
lighting fittings

Energy savings from compressors

Transition to inverters, reduced number of units, optimized air pressures, prevention of air leaks,
transition to energy-saving air gun nozzles

Climate Change Initiatives
Using Regional Biomass and Contributing to Biomass Power Generation
Tochigi Prefecture’s Kanuma City and the private sector are jointly operating a regional biomass power generation
business. Sewage sludge, food waste and other regional biomass is collected at sewage treatment facilities andturned into energy, generating approximately 900,000 kWh per year. NSK began participating in the business in 2021
by providing food waste.
In FY2022, we generated approximately 3.6 tons of food waste, and the amount of electricity generated from our foodwaste was approximately 67 kWh. We are participating in a biomass power generation business that makes use of ourindustrial waste. Waste plastic generated via our industrial activities is combusted, and the resulting combustion gas
is used as fuel to generate power.
In FY2022, we generated approximately 12.7 tons of waste plastic as materials to generate power, and the amount ofEnvironment

electricity generated from this waste plastic was approximately 20 kWh.

Sewage treatment
facilities
SewagesludgeDigestive
tanks

Biomass power
generation facilities

Sale ofelectricity

BiogasPowercompanies

NAKANISHI INC.

Biomass receiving
facilities

Kanuma City
food waste
collection

General hospitals
in Kanuma City

Meal supply centers80

Relationships between food waste and the amount of generated power
ton
30
25

1,000kW
360

338

22

300
257

20

240
14

15

180

10

120
67

5

60
3.6

0

2020

Food waste

2021

2022

0

The amount of generated power

Reducing Greenhouse Gas Emissions in Our Production Processes
Corporate energy consumption is one of the sources of greenhouse gas emissions, which cause global warming.
NSK uses large amounts of energy to manufacture products. For this reason, we are continually working to promotecareful energy conservation, such as by installing highly efficient facilities and making improvements to our production processes.
To this end, we are carefully working to eliminate waste across all our departments and all our employees, by improving
work efficiency in our production activities. Concrete examples include optimizing compressor pressures, preventing
air loss and making other improvements to our production processes.
As a monozukuri company, many of our previous energy reduction initiatives related directly to production. Goingforward, however, we also intend to pay attention to reducing energy use in air conditioning, lighting and other regular

Environmentally Friendly Buildings
NSK’s new RD1 headquarters building commenced operations in April 2017. It is surrounded by a beautiful natural environment—including the Nikko mountain range, Mt. Fukaiwa and the Oashi River—and strikes a harmony with Kanuma’s

Environment

sources of electricity consumption in our facilities, and continue to work to reduce our greenhouse gas emissions.

scenery, which changes with the four seasons. The exterior wall of the building is covered with “Sigma” environmental
control panels, made from special-order aluminum extrusion to protect the structure of the building. These Sigma
panels incorporate external insulation layers and natural ventilation devices, helping to control the environment both
inside and outside the building and guarantee
a comfortable internal environment. They also
contribute to significant reductions in energy
consumption. Sigma panels feature free-form
curve cross sections, which generate soft
shadows and, according to the time of day,weather conditions and time of year, result ina variety of light patterns.

RD1 headquarters building

Building exterior showing Sigma environmental control panels

81Energy-conserving Lighting
NSK is working to transition entirely to the use of LED lighting. In addition to a plannedtransition to LED lighting, we have also installed motion sensors in some corridors to reduce
unnecessary energy use.
All 21 mercury lamps in the parking lot of the Headquarters Factory were replaced by LED.
This resulted in energy saving of approximately 33,000 kWh.

Interior lighting controlled by motion
sensors

Green Spaces and Planting
Our headquarters factory has planted more than 300
of 10 different trees and seeds, including cherry trees,zelcova trees and grasses, outside the building to develop rich green walkways and gardens. In prefecturalproperty opposite our Headquarters main entrance,
we carry out beatification activities such as sowing
seeds and ivy groundcover, and actively take part inthe creation of green spaces.

Planting and green space management on company grounds

Underfloor Cooling and Heating Air-conditioning Systems
The air-conditioning systems in larger spaces in the RD1 building—such as entrances, showrooms and the Center Court with four-story atrium—make use of abundant groundwater. By
circulating groundwater and using it in conjunction with underfloor air-conditioning systems, NSK is making efficient use of small amounts of energy to make its residential spaces
comfortable.

The Center Court uses underfloor coolingand heating

All NSK employees engage in environmental contribution activities, ensuring that lighting and computer monitors are switched off
during out of office hours. Office air-conditioning is managed by Automated Control Systems that carefully ensure room temperatures of 28˚C in the summer and 21˚C in the winter.

Environment

Office Initiatives

Installing Automated Air-conditioning Control Systems
NSK’s air-conditioning systems are operated by Automated Control Systems. These systems can be programmed to stop operating
for a certain period of time within set intervals; we have set air-conditioning systems to stop operating for six minutes within every
30-minute interval, leading to reductions in energy use of approximately 20%.

Energy-saving Activities Using the “Power Visualization System”
NSK has installed a Power Visualization System thatuses internal monitors to visualize the power usage ofindividual buildings in real time. Visualizing power usage trends enables us to level our electricity demandby limiting power use at peak times. This, in turn, allows
us to reduce our electricity costs and greenhouse gas
emissions. Visualizing the effects of energy-saving
improvements also helps raise employee awarenessof energy conservation and plays a significant role inPower Visualization System

encouraging further environmental initiatives.

82

Installation of Solar Panels
NSK has long recognized the impact of energy supply and demand on the environment to bea matter of the utmost importance. For this reason, beginning in 2011, we installed 256 solar
panels on the walls of Headquarters Factory.
We newly installed approximately 1,600 solar panels (power generating capacity: 620 kW)
on the A1+ building which commenced operation in September 2022. All the generated
power is consumed at the A1 Factory. Going forward, we plan to install solar panels on theM1 building which is planned to be newly constructed at the Headquarters Factory.
Solar panels

Active Introduction of Hybrid Vehicles
In order to limit fuel consumption by and greenhouse gas emissions from company vehicles, NSK monitors and manages the distances
driven and gasoline consumed by each of its vehicles, and thereby raises environmental awareness among its drivers. We have actively
introduced hybrid and fuel-efficient vehicles with less environmental impact than gasoline vehicles, and as a result, have reduced
greenhouse gas emissions associated with driving by approximately 34% compared with 2.0 L gasoline vehicles. Headquarters Factory and A1 Factory together own 14 company vehicles, 10 of which are not used for transportation of goods. These 10 vehicles are all
hybrid vehicles.
From FY2023, we will be gradually replacing our current vehicles with electric vehicles.
<Fuel consumption>
FY2022 gasoline (regular/ high octane/ diesel oil) consumption: 11,367KL (Increasd by 14% year-on-year)

Choose industrial disposal sites with low environmental impact
At NSK, we cover electricity by generating power with a turbine. Heat from the incineration of waste is used to generate steam in thewaste heat boiler, which drives the turbine. Besides, we choose and outsource the processing of waste to the disposal sites which sell
the surplus electricity to private power companies.
We choose industrial disposal sites within Tochigi prefecture as close as possible in order to reduce greenhouse gas emissions incollecting and transporting wastes.

Environment

83Effective Use of Resources
Basic Approach
Resource issues caused by economic development and population growth are universal, and measures both to control
large-scale consumption of resources and to limit large-scale emissions of waste are required.
NSK will contribute to the resolution of societal issues by promoting activities toward the realization of a recycling-oriented society in response to global environmental issues such as the problem of plastics. We recognize that the
problem of plastics is related to further environmental issues as a result of excess use and inappropriate disposal processes, etc., including global warming caused by greenhouse gas emissions throughout its life cycle and the impactthat ocean plastic trash has on biodiversity.
In our Green Plan 2030 medium-term plan, we have set targets of reducing waste volumes and promoting zero emissions, with the aim of contributing to the establishment of a recycling-oriented society. Every year, we actively engage
in activities based on the 3Rs of reuse, reduce and recycle, with the goal of reducing and improving recycling rates ofwaste stemming from our production activities.
Waste Volumes per Unit Producedkg
250,000

kg/1,000 units

58.88

60.00
52.79
50.00

200,000
163,239
140,825

150,000

38.46

40.00
32.43

123,121101.654

20.00

50,000

0

30.00

2019

2020

Release amount

2021

2022

10.00

Environment

100,000

Per unite

Initiatives to Reduce and Recycle Waste Generated via our Production
Processes
At NSK, we are working on reducing industrial waste generated from our business activities. In FY2022, we generated
approximately 100.7 tons of industrial waste, a reduction of 18% from the previous value.
We had previously outsourced the processing of all waste fluid generated in the production process of surgical burs
to be treated as industrial waste. However, from FY2022, we now classify waste fluids as either containing boric acidor free of boric acid, and boric acid-free waste fluid is completely purified via wastewater treatment facilities ownedby the company before being externally released.
Around 90% of the industrial waste which we generated was waste plastic, waste oil, or sludge, and 99.1% of our industrial waste was reused as roadbed material and for other purposes after intermediate treatment.
We will continue to engage in efforts to reduce industrial waste and improve our resource recovery rate toward theestablishment of a recycling-oriented society.

84

Key Measures
Process improvements• Increasing yields of parts and products

Packaging material reductions• Reducing packaging materials by making our products smaller• Using returnable boxes• Switching to paper packaging materials for Eco-friendly packaging

Reuse of cutting fluids• Collecting and reusing cutting fluids stuck to shavings• Collection/reuse of oil mist floating in the workspace air

Reuse of washing fluids• Distilling, restoring and reusing spent washing fluids

Other reductions• Reusing wipes• Recycling metal waste• Recycling work clothes• Reducing food waste

Recycling Industrial Waste
Intermediate treatment

Waste item

Recycling
Plastic materials

Compression
Crushing

Waste plastic(mixture)

Blast furnace reducing agent
Roadbed materials

PC and OA
devices

Incineration

Waste power generation

Disassembly
Sorting

Plastic materials
Return of valuable materials

PC board
Electronic parts
Spray cans
Oiled wipes

Crushing
Smelting

Extracted metal

Incineration

Roadbed materials

Fuel chips

Crushing

Chip of wood

Iron products

Waste liquid cans
Sorting/Melting

Metallic material

Sorting/Incineration

Roadbed materials

Waste oil

Distillation and regeneration

Recycling

Sand/Sludge

Incineration

Metal and waste
plastic mixes

Roadbed materials

Glass
Crushing

Ceramics

Environment

Recycling

Fluorescent lamp

Landfill

Grindstone

FY2022 Recycling Rates
Waste volumes

Intermediate treatment volumes

Reuse volumes

101,654kg

101,654kg(100%)

100.739kg(99.1%)
Post-treatment final
disposal volumes
900kg(0.9%)

Direct final disposal volumes

Final disposal volumes

0kg(0%)

915kg(0.9%)85Recycling rates
%
100
99.5

99.4

99.1

2020

2021

2022

95

90

85

Reusing Cutting Fluids to Reduce Waste
NSK is actively engaged in reducing waste oil. The majority of our waste oil comes from cutting fluids used to process
metals and is generated by A1 Factory, our dedicated metal processing site.
During processing, cutting fluids adhere to metal shavings and float in factory working environments as oil mist. We
use ceiling-mounted oil mist collectors to collect these fluids and micro-filtration devices to recycle them.
At NSK, we develop activities for the co-existence of comfortable work environment maintenance and recycling-oriented monozukuri, including waste oil.
We reuse these recycled cutting fluids by micro-filtration devices in our production processes, enabling us to reduce
waste oil volumes.

Environment

86

Recycling and Reusing Cleaning Fluids to Reduce Waste
NSK uses hydrocarbon-based washing fluids to wash its parts. Dirty, used washing fluids are heated in distillation
regeneration machines, utilizing differences in boiling points to ensure only washing fluid substances are evaporated.
The resulting clean recycled washing fluids are reused in our factories to wash parts.
Washing Fluid Recycling System (provisional name)

Vacuum distillation chamber

Cooling

Dirty washing fluids are heated,using differences in boiling points
to ensure only washing fluid
substances are evaporated

Evaporated washing fluid iscooled and reliquefied

Dirty fluid
storage

Distillation recycling
chamber
Dirty fluid

Heat-transfer
oil is used toindirectly heat
the dirty fluid

Only clean washingfluid substances isreusedConcentrated waste fluid
After washing fluid substances areevaporated, the waste substances
remaining in the distillation chamber isconcentrated to reduce waste volumes

Promoting In-house Treatment (Purification) of Boric Acid-free Waste Fluids
At NSK, we classify the waste fluids generated in the production process of surgical burs as either that containing
boric acid or that free of boric acid. Boric acid-free waste fluid goes through purification treatment at wastewater
treatment facilities owned by the company before being released into nearby rivers once the safety of the water
quality has been verified.
In order to track the risk of water pollution, we regularly take samples of the water at our wastewater treatment facilities and conduct simple water quality analysis to verify that boric acid concentration levels are within the required
standards. As a result, in FY2022, we generated approximately 33 tons of waste fluid, a reduction of 48% year on year.
Diagram of boric acid-free waste fluid treatment
Free ofboric acidIn-house wastewater treatment facility(purification treatment)+

Simple inspection(safety verification)

Released into rivers

Waste fluid
Storage tank(temporary storage)
Contains
boric acid

Treatment as
industrial waste(resources recycled)

Changes in Waste Oil Volumes & Per Unit Figures
kg/1,000 units

kg

1.60

100,000

1.40

80,0001.02
0.92

60,00055,004

1.20

63,9340.46

40,00032,99820,000

2020

2021

2022

0.80

0.40

0.00

Per unite

Release amount

Using the Cross-jurisdictional Waste Management Certification System
to Reduce Waste Plastic
NSK is engaged in work uniform recycling that makes use of the Ministry of the Environment’s Cross-jurisdictional
Waste Management Certification System, so reducing its waste plastic volumes.
The “Cross-jurisdictional Waste Management Certification System” is a system in which manufacturers are working
to improve the recycling rate through a series of life cycle assessments, ranging from materials to design, production,and recycling. Using this system, we sell our used uniforms as valuable resources to manufacturers, where they are
recycled into felt.
around 2.5%.

Uniforms

Recycled fibers

Environment

In FY2022, by recycling approximately 432kg of used uniforms, we managed to reduce our waste plastic volumes by

Forming felt

Used uniforms by year
kg
800
743

750
700

700

650
600
550
500
432

450
400

2020

2021

2022

88

Reducing and Recycling Repair and Service Process Waste
Including Maintenance Guides with Repaired Parts to Encourage Long-term Use
When returning repaired parts to its customers, NSK includes Maintenance Guides to encourage the long-term use of
its products. These Maintenance Guides instruct customers on how to appropriately maintain their products, enablingthem to extend the life expectancy of their products and contributing to the effective use of limited resources.

Establishing a Customer Service Helpdesk to Communicate Appropriate Methodsof Maintenance
NSK has established a Customer Service Helpdesk on its company website. This helpdesk receives a large volume ofinquiries and feedback related to product quality, prices, product specifications and maintenance. Questions related
to maintenance methods account for approximately 10% of our monthly inquiries. We explain appropriate methods ofmaintaining our products to help our customers understand how to use their products safely and for a long time.

Environment89

Our Products and Environmental Activities
Basic Approach
NSK recognizes that companies are expected to respond to environmental issues such as climate change, and societal
changes such as a rapidly ageing society. Consequently, we believe it is important we increase our profits and launchhighly competitive products while actively contributing to the resolution of societal issues.
We are working to develop products that help society to reduce its environmental impact and, at the same time, weare responding to the needs and expectations of markets. In this way, we seek to achieve sustainable growth hand inhand with society.

Environmental Design in the Development Process
At NSK, at the development stage we seek to accurately grasp and reduce the environmental impact of the entire
lifecycle of our products—from materials to distribution, use and disposal.
We aim to provide high-performance products that are extremely energy-efficient, as well as products that are morecompact, lighter, and incorporate multiple functions in response to increasing demand for mobile dental care in a rapidly ageing society. We have set ourselves the goal of “coexistence between people and the earth,” and aim to become
a company that contributes to improving the global environment and society through the provision of these products.

Structures that Facilitate User Maintenance (Resource Conservation)
Air Turbines are one of our core dental products. They are used to drill teeth, and powered by compressed air. Air Turdrill teeth. The rotor part of the system is known as the “cartridge.”
We gave careful consideration to the maintainability of the cartridge, and designed an easily interchangeable structure. Enabling customers to replace the cartridge extends the life-expectancy of the turbine, making a significant
contribution to saving resources and reducing greenhouse gases during transit.

Environment

bines work by using compressed air to drive rotors that spin an axle; the axle is fitted with a bur, and this bur is used to

Air Turbine Structure

Cartridge

Compressed air

Turbine body90

Integrating Distinct Products for Greater Efficiency
As societies begin to age with increasing rapidity, we can expect greater demand for mobile dental care. And, sinceelderly people today retain more of their natural teeth, a wide range of mobile treatment will be required.
Our VIVA ace mobile dentistry system integrates a high-performance micromotor, an ultrasonic scaler, a three-way
syringe, and a vacuum into a single package.
Previously, our mobile dentistry solutions required three distinct devices: the VIVAsupport 2, the VIVAMATE G5, andVarios 370. However, VIVA ace not only broadens the scope of possible treatments, but provides the convenience of a
traditional dental clinic treatment environment in condensed form in a high-added value product.
Condensing necessary functions into a single package realizes significant energy savings when compared to using avariety of distinct devices.
At NSK, we intend to recognize future societal changes as business opportunities, and provide products that cater tomarket needs and expectations in a timely manner.
VacuumUltrasonic scaler
Micromotor
Three-way syringe
Vacuum bottle
Water
spray

Water bottle
Control panel

Water bottle
Ultrasonic scaler

SalivasuctionVacuumhose
Cable

Vacuum bottle

Micromotor

Foot control

Handpieces used to treat patients must always be washed and sterilized after use. At NSK, we have launched iCare,

Environment

Product Development that Takes Maintenance and Other Lifecycle Processes into
Consideration
a device that automatically washes and lubricates up to four handpieces at once, and iClave, a device that sterilizes
using high-pressure steam.
The iCare automatic cleaning and lubrication system dispenses lubricant volumes tailored to the type of handpiece
used, so reducing excess oil use.
The iClave mini2 high-pressure steam sterilization system is more compact than its predecessor, the iClave mini. In
addition, increasing the high-pressure steam gravity displacement process enables even the inside of handpieces tobe carefully sterilized, and improves the device’s sterilization capabilities.
Our maintenance products enable users to keep their handpieces in better condition for long periods of time, andcontribute to reduced use of new materials. They also help prevent infection, and can therefore be used safely.

iCare

iClave mini2

91

Energy Conservation
Outstanding power increase for faster cutting speeds (energy conservation)
The new Ti-Max Z Series Air Turbine includes the addition of a new proprietary system developed using the latest fluid
simulation software to achieve a significant increase in power from conventional models. Increased speeds enable
us to decrease cutting times by approximately 30% in comparison to conventional models, reducing chairside timeand minimizing patient discomfort. This model also features an unprecedented increase in torque, making it highly
effective in removing zirconia.

Ti-Max Z990L

Ti-Max Z890L

Efficient Transmission of Compressed Air to Drive the Rotor (high-efficiency and energy-saving)
Our Air Turbine dental products efficiently transmit compressed air to rotate the rotors. This improves the basic performance of the product, including its rotational speed and rotational torque.
Our S-Max M Turbine uses a modified rotor shape that increases the surface area that receives compressed air by
100% (a two-fold increase) over previous models. Accordingly, the rotor spins more efficiently when using the same
volume of compressed air as previous models, leading to a significant increase in torque from 20W to 26W.
Air Turbine Structure
Cartridge

Environment

Rotor
Air discharge

Air supply

Improved Internal Circuitry Leads to Energy Savings
At NSK, our industrial ultrasonic polishing devices are highspeed devices that operate at 19,000 to 29,000 rotations per
second, with a maximum amplitude of 40 μm.
In our latest models, we have introduced a raft of improvements over previous versions, including: a heat-protection
function to prevent temperature rises and enable continued
use; improved visibility through the use of large numbers ofLEDs; and energy savings of 13% by refining the structure of
its internal circuits.

Ultrasonic polishing device: Sheenus ZEROAt NSK, we work to reduce the environmental burden of
our products throughout their lifecycles, and to this end we
promote energy savings while they are being used.

92

Effective Use of Resources
Transition to Paper Packaging Materials
Recently, the words “Plastic-free” and “Plastic reduction” have become more common. Measures are taken inside andoutside of Japan such as charging for disposable plastic containers.
At NSK, we recognize that waste plastics have a major impact on the global environments, such as by contributing
to marine pollution. For this reason, we are working on switching from the use of plastic to recyclable paper packing
materials for approximately 80% of our core products: Air Turbines, Contra-angle Handpiece products, and Handpiecefor dental cleaners. Switching to paper packing materials enables us to make our packaging about 30% more compact
and about 50% lighter than our previous plastic packaging.
Besides, we had used approximately 55.5 tons of plastic materials for plastic packaging per year. We successfully
reduced plastic materials by approximately 49% by switching to paper packing materials since FY2021.

Management of Chemical Substances
At NSK, we have formulated the Green Procurement Guidelines to define our basic approach to environmentallyfriendly materials and parts, and together with our Japanese and overseas business partners we promote green procurement activities.

Our Products and Chemical Substance Management
Acquiring Information Related to Chemical Substances Contained in Products
In order to comply with applicable laws and regulations, to prevent negative health impacts of controlled chemical
substances, and to prevent environmental pollution, we use chemSHERPA. This tool allows us to appropriately manage information on chemical substances contained in our products across our entire supply chain, from upstream todownstream companies, improving information accuracy, and enabling us to carry out more reliable chemical subIn addition, while laws and regulations in each country are being strengthened, we regularly verify the applicabilityof the laws and regulations. At the same time, we have built a database for the integrated management of this information. At the end of FY2022, we have confirmed the status of chemical substances contained in all of the parts andmaterials that we procure.

Environment

stance management.

Preventing Contamination (preventing contamination of our products)
In the EU’s RoHS Directive, the use of four phthalates were prohibited in medical devices, the deadline which was July
2021. In addition, an exemption of lead included in metallic materials expired. For four phthalates, we completed thetransition to the use of parts and materials that contain none of the four phthalates in question at the end of December
2020. Besides, for lead included in metallic materials as the exemption of the EU’s RoHS Directive, we confirmed thatthe report which extends the limit of exemption issued on January 13, 2022, from the investigative body which was
authorized by the European Commission.
In recent years, progress has been made on strengthening regulations for chemical substances in various countries.
We will continue to monitor relevant regulations on chemical substances in each country as we strive to ensure our
products do not contain any controlled chemical substances.

93

Reducing Emissionsof Hazardous Chemical Substances
Basic Approach
Our lifestyles are made possible by various natural resources, including the atmosphere, water, soil and animals andplants. NSK’s entire value chain—from raw materials procurement and product manufacturing to the energy it uses
for transportation—has some impact on ecosystems. We work hard to maintain ecosystems from two perspectives:contributions through our business activities and social contributions related to nature conservation. One of ourecosystem conservation activities entails the proper management of chemical substances that have the potential toaffect ecosystems.
In terms of concrete initiatives aimed at preventing and reducing the risk of chemical substance contamination, we
regularly take and analyze the water quality of samples of factory wastewater that has been treated at our in-housewastewater treatment facilities.
Waste fluids containing boric acid from our production processes are stored temporarily in storage tanks and discharged as industrial waste. This development was a result of the fact that there is a significant distance to connect
to the wastewater treatment facilities, and if we installed pipes, we would not be able to wholly eliminate the risk ofpipe leakage. We also conduct simple water quality analysis to detect boric acid concentrations in anticipation of therisk of boric acid flowing into wastewater treatment facilities. At NSK, we make advance assessments of the impact
our business activities have not only on human health but also on the environment, and we continuously work hard toeliminate as far as possible all risks of environmental pollution.

When using new chemical substances, NSK refers to information regarding their hazardousness and toxicity containedin safety data sheets (SDS). Based on this information, we identify appropriate methods of handling the chemical
substances, necessary facility specifications, levels of risk posed to workers and potential impacts on worker health.

Environment

Advance Assessment of Chemical Substance Risks

We then conduct a chemical substance risk assessment and, if necessary, install local exhaust ventilators and otherdevices, and so work to improve worker safety.

Reducing Release and Transfer of PRTR Substances
NSK works to manage and reduce its use of chemical substances listed on the Pollutant Release and Transfer Register(PRTR*). We also ensure such substances are handled according to SDSs, and we carry out safety management of ourwaste. In addition, once a year we aggregate stock, purchase, use, waste and release volumes of PRTR substances and,
where necessary, notify the relevant parties. At NSK, we are engaged in initiatives to store washing fluids in airtightconditions and increase recycling rates.
As a result of initiatives such as not replacing the chemicals used in our production processes, we reduced our releaseand transfer of PRTR substances to approximately 17kg in FY2022.
* PRTR(Pollutant Release and Transfer Register)
The Pollutant Release and Transfer Register is a system that enables Japanese administrative bodies grasp, aggregate, and publicize
information regarding chemical substances that are potentially harmful to human health and to ecosystems. Companies independently assess emissions of these substances from their work sites into the environment—into the atmosphere, into bodies of water, and into
the soil—and submit reports to the relevant administrative bodies once a year.

94

PRTR Release and Transfer Volumes
kg
60
50
40
30

38

20

20
10
0

21

9

17

2020

8

2021

Release amount2022

Transfer amountManaging Ozone Depleting Substances
NSK uses specified fluorocarbons, which are ozone depleting substances, as refrigerants in the air-conditioners in
its factories. We ensure that waste is appropriately treated in line with all applicable laws. In addition, as required by
the Act on Rational Use in FY2022 and Proper Management of Fluorocarbons, we have verified that our calculated
leakage amount of fluorocarbons is less than the equivalent of 1,000 tons of CO2. Going forward, we intend to further
strengthen our management of fluorocarbons through daily and regular inspections.

Lead-free Initiatives
ify whether they have established measures to prevent mixing of lead-containing solders and lead-free solders. In
FY2022, we found no non-conformance related to mixed toxic substances inside and outside the company.

Environment

All solders used at NSK are lead-free solders. In addition, when carrying out audits of our business partners, we ver-Measures to Combat Atmospheric, Soil and Water Pollution
In order to prevent emissions of hazardous chemical substances from causing atmospheric, soil, or water pollution,
NSK ensures it complies with all relevant laws, ordinances and regulations. In addition, we also enter into agreementswith local organizations and set our own voluntary standards.

Measures to Combat Soil and Groundwater Pollution
NSK does not use chemical substances that cause soil pollution. With regard to groundwater at Headquarters Factory,
we carry out water quality analyses once every two months to verify that we have not exceeded applicable standards.
Our A1 Factory does not use groundwater, so we do not carry out analyses there.

95

Measures to Combat Water Pollution
NSK carries out water quality analyses of factory wastewater at the final outlets at the site boundary which releases
water outside of the company once a month. In particular, we analyze concentrations of hydrogen ions and biochemical oxygen demand. Besides, for nitrogen and phosphorus quantity, since FY2021 we increased the quantity checks
frequency from once a year to every month, consistently monitoring the water quality at the outlets.
In FY2022, as part of our measures to address excessive BOD in the A1 Factory septic tanks, we temporarily increased
the capacity of our transfer pumps in February, which we confirmed resulted in worsening the water quality of factory
wastewater. We implemented permanent measures to right this situation and have confirmed the effectiveness ofthese corrective actions. Accordingly, we verified that BOD has not exceeded the standards at any point thereafter. In
addition, the wastewater treatment facilities in our factories are fitted with an external interlock function that forciblyinterrupts the release of wastewater if abnormalities are detected. We verify that this function operates properly oncea year.
Headquarters Factory Water Quality Analysis Results FY2022
Measured Substance
Units
Standards

Hydrogen ion
concentration

Suspended
solidsBiochemical
oxygendemandn-HexaneNitrogenquantity

Phosphorus
quantity

-

mg/L

mg/L

mg/L

mg/L

mg/L

5.8~8.6

50 or less20 or less5 or less

120 or less16 or less

January

7.5

< 1.0

11.5

< 0.5

1.5

< 0.1

February

7.6

< 1.0

5.8

< 0.5

1.9

0.1

March

7.6

< 1.0

1.0

< 0.5

4.4

0.2

April

7.6

< 1.0

2.7

< 0.5

4.5

0.3

May

7.8

< 1.0

1.8

< 0.5

4.7

0.3

7.7

1.2

1.7

< 0.5

4.0

0.3

July

7.8

< 1.0

1.2

< 0.5

2.5

0.2

August

8.0

< 1.0

1.7

< 0.5

2.5

0.3

September

8.0

< 1.0

2.0

< 0.5

2.9

0.5

October

7.8

< 1.0

1.4

< 0.5

2.5

0.4

November

7.9

< 1.0

1.4

< 0.5

2.3

0.4

December

8.0

3.6

3.7

< 0.5

1.3

0.2

n-HexaneNitrogenquantity

Environment

June

A1 Factory Water Quality Analysis Results FY2022
Measured Substance
Units

Hydrogen ion
concentration

Suspended
solidsBiochemical
oxygendemandPhosphorus
quantity

-

mg/L

mg/L

mg/L

mg/L

mg/L

Standards

5.8~8.6

50 or less20 or less5 or less

120 or less16 or less

January

7.6

6.4

10.6

< 0.5

2.5

0.2

February

7.4

1.2

23.1

< 0.5

15.5

1.5

March

7.2

1.6

7.8

< 0.5

5.8

0.3

April

7.5

< 1.0

1.4

< 0.5

2.8

< 0.1

May

7.5

4.4

< 1.0

< 0.5

7.3

0.2

June

7.6

1.2

5.7

< 0.5

4.6

0.1

July

7.4

< 1.0

1.7

< 0.5

3.3

0.2

August

7.6

< 1.0

1.1

< 0.5

3.0

0.2

September

7.7

< 1.0

1.6

< 0.5

1.8

1.3

October

7.7

6.8

2.5

< 0.5

6.9

0.5

November

7.7

2.4

1.8

< 0.5

2.5

0.2

December

8.0

12.4

1.8

< 0.5

3.1

6.1

96

PCB Measures (storage status)
NSK treats polychlorinated biphenyl (PCB) waste and PCB-containing in-use electrical equipment in line with the Law
Concerning Special Measures for Promotion of Proper Treatment of PCB Waste*. More specifically, we work together
with Japan Environmental Storage & Safety Corporation (JESCO) to treat high-concentration PCB waste, and we work
together with government-certified industrial waste disposal companies to treat low-concentration PCB waste. At
this time, we do not have any PCB waste in storage.

Reducing Emissions into the Atmosphere
NSK does not emit NOx, SOx or VOC.

Environment

97

Management of Chemical Substances
Basic Approach
Countries and regions around the world are strengthening regulations related to chemical substances. Examples
include the Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc. in Japan and the
RoHS Directive and REACH Regulation in the EU. With the addition of increased interest in SDGs and ESG, companies
are expected to further improve their management systems and information disclosure for chemical substances.
With regard to chemical substances used in its production processes and contained in its products, NSK has established and conforms to management standards that encompass risks to health and the environment and limits toquantities contained in its products.
In addition to complying with applicable laws and regulations, in order to ensure the penetration and sharing of SDGs
and ESG, we work together with all business partners involved in the transmission of chemical substance information,and carry out operational management of chemical substances in a supply chain-wide manner.

Management of Chemical Substances in our Production Processes
NSK works to prevent environmental pollution caused by chemical substances.
Specifically, we manage chemical substances in a manner that prioritizes the environment from purchasing and use todisposal and work to eliminate environmental risks posed by the chemical substances we use as far as possible. It has
been internationally agreed that we should ensure the impact of chemical substances is minimized not only on humanhealth but also on the environment.
As countries around the world strengthen their management of chemical substances, at NSK we take a precautionary
imizing risks before we start to use them. In this way, we are working to eliminate hazardous substances from our
production processes and our products, and thereby improve safety both for our production line workers and for usersof NSK-brand products.

Environment

approach, carrying out advance assessments of the environmental risks posed by chemical substances, and min-Advance Assessment of Risks Posed by Chemical Substance
When using new chemical substances in either its production processes or its products, NSK assesses the risks posedby chemical substances in advance.
Before using new chemical substances, we acquire the relevant SDSs*, carry out risk assessments and take theappropriate measures. We assess levels of risk posed to workers and potential impacts on worker health based on
information regarding the hazardousness and toxicity of the chemical substances, methods of handling them, work
environments and facility specifications. According to the results of the above risk assessments, if necessary we install
local exhaust ventilators and other devices to improve worker safety. In addition, regulations on the use of chemical
substances in Japan are gradually being strengthened in accordance with the revision of the Industrial Safety and
Health Act. In order to minimize the risks posed by chemical substances, we explore potential substitutes, and havealready identified a substitute for 1-bromopropane, which is contained in the washing fluids used to wash parts in our
production processes.
* Safety data sheets (SDS)
In order to encourage companies to improve proper management of chemical substances, the Act on confirmation, etc. of Release
Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management Thereof requiresthat when specified “chemical substances or products containing chemical substances” are transferred from one company to another, safety data sheets containing information related to the characteristics and handling methods of the chemical substances areprovided in advance.

98

Revision of safety data sheets (SDS) accompanies the revisionof Japanese Industrial Standards (JIS)
Based on the GHS document sixth revised edition of United Nations, JIS Z7252: Classification of chemical based on“Globally Harmonized System of Classification and Labelling of Chemicals (GHS)” and JIS Z7253: Hazard communication of chemicals based on GHS-Labelling and Safety Data Sheet (SDS) were revised on May 25, 2019.
At NSK, we have completed the revision for 2019 as the grace period of three years will be expired on May 24, 2022.
New safety data sheets are available on our website.
>Related Link:
Dental business SDS
Industrial business SDS

Green Procurement
In recent years, regulations on chemical substances contained have become increasingly strict, including the implementation of the RoHS Directive in various countries and the revision of REACH Regulation, as well as the TSCA in
the United States. In addition, in order to reliably monitor the regulations that are being strengthened in each country,
such as the recent movement toward newly strengthening regulations on PFAS (per- and polyfluoroalkyl substances),companies are required to establish and operate thorough management systems.
NSK uses a wide variety of chemical substances both in its monozukuri (manufacturing) processes and in its products.
In order to appropriately manage these chemical substances, we have established the “NSK Green Procurement
Guidelines.” We regard minimizing the environmental risks posed by chemical substances to be an important issue,
and we are promoting initiatives to identify which chemical substances must be managed, as well as working to reduce their content and find potential substitutes.
when they are shipped, and at minimizing risks both to human health and the global environment. In addition, as ourbusiness becomes increasingly global, we make sure to collect and evaluate the latest trends in chemical substancemanagement policies and regulations in countries around the world and see they are reflected in our management ofchemical substances.

Environment

The above initiatives are aimed at preventing the risk that our products will contain hazardous chemical substances

We have designated two substances as “substances prohibited to be included in procured items such as productparts and materials (prohibited substances)” and “substances that need to be reduced or replaced by understanding
their content in procured items in order to reduce environmental impact (controlled substances).” We promote “green
procurement” in cooperation with our business partners and suppliers to procure products, parts, and materials withlow environmental impact.
Green Procurement Promotion System
Environmental Conservation System
Managing environmental impact of our factories

Green Procurement Promotion
Management of Chemical Substances
Contained in our ProductsManaging chemical substances contained in our products

99

Green Procurement Promotion Structure
NSK has established a Pollution Prevention Subcommittee, comprised of members of its Design and Procurement Departments, under the supervision of the Environment Committee. The subcommittee monitors chemical substances
regulations, seeks to standardize our chemical substance management systems and promotes research into chemical
substances contained in our products.
Key Regulations regarding Chemical Substances Contained in Products in Countries around the World
EU

China

Korea

North America•RoHS Directive•REACH Regulation•WEEE Directive•ErP Directive•China RoHS

•Korea RoHS

•California Proposition 65

Japan•J-Moss (Japan RoHS)

Asia and Oceania

South America•Turkey RoHS
•UAE RoHS•Saudi Arabia RoHS

•Thai RoHS
•India RoHS
•Vietnam RoHS•Singapore RoHS

•Brazil RoHS

Environment

EU neighbors

Advance Verification of Substances Contained in our Products
Various countries are formulating laws and regulations governing chemical substances contained in products, suchas the RoHS directive and REACH Regulation; these regulations cover a growing number of chemical substances,products and uses.
NSK investigates information related to chemical substances contained in its products, auxiliary materials, and packaging materials. The information we gather is shared via internal systems and made available for relevant parties toverify when necessary.
We list banned substances and managed substances in our Green Procurement Guidelines. Before developing new
products or switching to different parts and materials, we verify in advance the substances they contain and thereby
ensure our products are not hazardous to humans or the natural environment. In addition, every year we carry out
environmental audits of approximately 15 business partners. On these occasions, we directly verify how chemical
substances contained in products are being managed and, if their systems are unsatisfactory, request corrections andprovide support for the establishment of appropriate systems.

100Environmental Audits of Business Partners
When carrying out environmental audits of business partners, NSK also takes the opportunity to directly verify whether they are carrying out Green Procurement.
We ensure our business partners have an accurate understanding of our Green Procurement Guidelines, and carry out
regular investigations to verify whether or not their products contain any substances defined as banned substances ormanaged substances in our guidelines. When we revise our Green Procurement Guidelines, we also verify whether or
not the revised information is being properly communicated to our secondary business partners.

Compliance with the RoHS Directive
In 2006, the EU issued the RoHS directive, which limits products from containing specified hazardous substances.
Since then, growing numbers of regions outside the EU have also demanded compliance with these standards. The
range of product fields falling under the scope of the directive has also steadily expanded, with medical devices—including NSK dental products and medical products—covered in 2014. RoHS directive standards have subsequently
become even stricter, with the additional prohibition of four phthalates and revisions such as the abolition of exempt
items.
At NSK, we share the results of investigations into chemical substances contained in our products via internal systems.
Using information available in these internal systems, we identified parts and materials containing the four phthalates
and completed a transition to substitute materials.

Compliance with REACH Regulation
The EU’s REACH Regulation is a set of comprehensive chemical substance management regulations that requires
currently in use or new.
REACH Regulation applies to chemical substances contained not only in chemical products but also in articles suchas machines and molds. The regulation chemical products came into effect in 2007, and is gradually being enforced.
With regard to the regularly updated candidate substances of very high concern for authorization, NSK continually

Environment

the registration, evaluation, authorization, and restriction of chemicals; it applies to all chemicals, whether they arecarries out investigations into whether they are contained in its articles, and verify that contained quantities do not
exceed 0.1%.

101Conserving Water Resources
Basic Approach
Due to climate change and the destruction of forests, and to population growth and economic development in developing nations, water shortage risks are increasing around the world. In recent years, the impact of climate change andother factors have led to worsening quality of river water, resulting in strengthened regulations. From the perspectiveof risks to company activities, water-related issues are of great urgency. In FY2022, NSK used approximately 17,000m3
of clean water and 8,800m3 of industrial water. After use, this water was purified at our in-house wastewater treatment
facilities before being externally released.
Going forward, we intend to continue focusing on the effective use of water resources, and promote activities thatenable us to have a positive impact on local aquatic environments.

Controlling Water Use
Installing Water Faucet Adjustment Valves
In some in-house processes, NSK has installedadjustment valves in its water faucets. These
adjustment valves enable small volumes ofwater to be released at high pressures, helping
us to wash our products efficiently. We intend
to install these adjustment valves in water
including in production processes, canteens

Environment

faucets that see large amounts of water use—
An adjustment valve

and washing basins—and thereby limit ourwater use.

Water Circulation in our Electrical Discharge Machines
At its A1 Factory, NSK uses a total of seven
general-purpose and three automatic electrical discharge machines. These electricaldischarge machines use a mix of industrial
water and dielectric fluid, which is poured
onto metals during processing. We use
approximately 800m3 of industrial water per
year on electrical discharge machining, which

Electrical discharge machining line

Water circulation tank with 100 L capacity

represents approximately 5% of total industrial
water use at A1 Factory.
In FY2021, we completed installing water circulation devices on all our general-purpose electrical discharge machines. This enables us to use filters to remove impurities contained in post-process water. This water is then reused insubsequent electrical discharge machining processes. This resulted in a significant reduction in water use. In FY2022,
we intend to continue our utilization of water circulation devices in endeavoring to reduce industrial water use.

102

Wastewater Purification
The water NSK uses at its factories is purified at in-house wastewater treatment
facilities to meet water quality standards, before being released into nearby
rivers or industrial park wastewater treatment facilities. We carry out regularinspections at our wastewater treatment facilities, managing them at all times
to ensure there are no irregularities. We also carry out water quality analyses
at final outlets to verify that our effluent water meets applicable water quality
standards. In addition, we have installed water-release interrupt functions that
activate if effluent water exceeds water quality standards. We verify that thisfunction works properly once a year. In this way, we have implemented ample

Our in-house wastewater treatment
facilities

measures to combat environmental risks in the case that effluent water exceeds
applicable water quality standards.

Environment103

Biodiversity Preservation
Basic Approach
If we wish to live in harmony with nature, we must protect abundant forests and other forms of nature around theworld. Yet forests around the world are shrinking, the habitats of diverse creatures are becoming fragmented andloss of biodiversity is growing worse. Loss of biodiversity leads to various issues, including the depletion of biologicalresources that are vital to society, the inducement of natural disasters and the progress of global warming and, as such,it presents a risk to the sustainability of society as a whole.
In the face of such risks, NSK carries out activities aimed at reducing its impact on the environment, including biodiversity.
By helping to prevent global warming, using resources effectively and managing chemical substances, we act in anenvironmentally friendly manner when it comes to monozukuri (manufacturing) and to the products and services weprovide.
At the same time, we promote conservation activities that have a direct bearing on nature, and so contribute to therealization of a society that coexists in harmony with nature. It takes many years for biodiversity and ecosystems torecover and for their health to improve. For this reason, we analyze the risks and opportunities to our company stemming from biodiversity preservation measures, and promote biodiversity preservation activities in a long-term andsustainable manner.
Biodiversity Policy
Risks

Opportunities

Managing
paper use

• Resource depletion due to deforestation for resource
procurement• Acceleration of work style reform with digitalization, remote
work, etc.
• Contributions to SDGs by reducing paper use

Managing
wastewater• Ecological destruction due to the impact of releasing dirty
factory wastewater into rivers• Carry out regular inspections of factory wastewater devices• Check external water-release interrupt functions activate
correctly in cases of abnormal readings• Carry out regular water quality analysis and trend monitoring

Optimizing
planting at ourfactories• Shrinking green spaces due to climate change leading toaccelerated global warming, loss of habitats and collapse ofbalanced ecosystems• Manage planting within company grounds in an appropriatemannerEnvironment

Item

104

The Relationship between our Company and Ecosystem Conservation
Our lifestyles are made possible by the fruits of nature—also known as ecosystem services—provided by natural capital such as the atmosphere, water, soil and plants and animals.
NSK recognizes that its entire value chain—from materials procurement and production to energy used for transportation—has some impact on local ecosystems. For this reason, we work to maintain and recover ecosystem services fromthe dual perspectives of contributions through our business and social contributions related to nature conservation.
As far as contributions through our business is concerned, we provide energy-saving and other environmentallyfriendly products and, as part of our ecosystem conservation activities, carry out proper management of chemical
substances. With regard to social contributions related to nature conservation, we promote local clean-ups, green
space management and other ecosystem conservation activities.

Supply of raw materials such as timber

Corporate
activities

Ecosystems
Reduced impact of business activities on
ecosystems

Provision of environmentally friendly
products and services

Social contribution activities related tonature conservation

Management of Chemical Substances Contained in Products
As part of its ecosystem conservation activities, NSK manages chemical substances contained in its products fromcurement and production processes.
In particular, we carefully manage chemical substances in key procurement materials according to our Green Procurement Guidelines. In cooperation with our business partners, we carry out investigations into chemical substances
contained in the materials and parts used in our products, as well as in all purchased parts—including auxiliary materi-Environment

the product development stage. This includes chemicals contained in materials and parts in every stage of the pro-als—used in our production processes.

Reducing Paper Use to Promote Biodiversity
In the past, NSK has used paper in the performance of various procedures and sharing information. Typical examples ofthis include sending documents and materials to business partners and the distribution and posting of internal documents. However, in recent years, advances in IT and changes in work styles have led the push toward going paperless.
In the future, there will be even more opportunities for us to utilize electronic data in online exchanges as we witness
the expansion of work style reforms that allow employees to engage from outside the office through remote work
(telework) and other similar innovations.
At NSK, we believe that promoting efforts toward going paperless reduces paper waste and contributes to the preservation of the natural environment, one of the goals of the SDGs. Specific activities include digitalizing various in-houseapplication forms and enabling work instructions for our production processes to be viewed via digital media as we
strive to reduce per employee use of copier paper.
In order to produce paper, forests must be cut down to obtain those resources. Reducing paper use also reduces
deforestation, thereby protecting the precious resources of the earth. We are working to resolve environmental problems one by one, starting from the issues that we are the most familiar with.

105Per unit Copier Paper Use
1,000sheets

Sheets per person

5,000

250
212

4,000

176
156

3,177
2,842

3,000

150

2,654
100

2,000
50

1,000

0

2020

2021

Copier Paper Use

2022

0

Sheets per employee

Coexisting in Harmony with the Natural Environment
NSK’s Headquarters Factory is surrounded by a beautiful natural environment—
including the Nikko mountain range, Mt. Fukaiwa and the Oashi River—and strikes
a harmony with Kanuma’s scenery, which changes with the four seasons.
Goheiiwa, a mountain rich in greenery that neighbors our Headquarters Factory,
provides a habitat for wild animals; fireflies also live by the river that runs between
the mountain and our factory.
At NSK, we endeavor to minimize the risks our business activities have on ecosysgoals and carry out our business activities accordingly. We engage in initiatives
to safeguard plant and animal ecosystems, such as helping to maintain the green

Goheiiwa, a mountain neighboring
Headquarters Factory, provides a habitat
for wild animals

spaces around Goheiiwa.

Environment

tems. We have defined “coexistence between people and the earth” as one of ourAppropriate Management of Planting at our Factories
Our headquarters factory has planted more than 300 of 10 different trees andseeds, including cherry trees, zelkova trees and grasses, outside the building
to develop rich green walkways and gardens. In prefectural property opposite
our Headquarters main entrance, we carry out beautification activities such as
sowing seeds and ivy groundcover, and actively take part in the creation of green
spaces.

Company Gardens

106

Purifying Factory Wastewater
In order to prevent water contamination due to wastewater, NSK regularly verifies it complies with wastewater standards set out by applicable laws and ordinances.
We have established wastewater treatment facilities within company grounds, where water used by our factories
is purified to meet permissible standards. This water is then released into rivers via the company pond. We monitor
the concentration at the outlets of these wastewater treatment facilities at all time. In addition, we have installed aninterlock function at our facilities that activates to interrupt the external release of wastewater if the concentration
exceeds standards, We verify that this interlock function operates properly through regular maintenance.
In addition, since the use of boric acid is required in some production processes, we verify the stability of our water
quality by carrying out a voluntarily simple analysis of the boric acid concentration. In FY2022, we verified that we havenot exceeded the applicable standards.

Communication with Local Communities
Training and Education
In order to resolve recent environmental issues, NSK believes it is imperative that all
stakeholders—not just NSK employees—share responsibility for environmental issues
and recognize the importance of initiatives to improve them.
Every year, we invite elementary schools from Kanuma, Tochigi Prefecture, to participate in factory tours. On these tours, we give lectures related to environmental
issues and our company’s environmental activities, discussing questions such as:
What can we do as individuals in response to existing environmental issues? Why arecompanies recently placing greater importance on environmental issues? and, Whatenvironmental activities are they carrying out?
company that gives due consideration to the environment and develops locally oriented business by local residents.

Environment

Through these activities, we believe that we have been recognized as a monozukuri

107Supply Chain Environmental Initiatives>Related Link:
Green Procurement Guidelines

Environment108

GovernanceCorporate Governance
Basic Approach
NSK’s basic management policy is to increase its corporate value as a global company that is trusted by shareholders
and other stakeholders. As such, we promote the strengthening and enhancement of our corporate governance system.

Outline of the Management System
Corporate Governance System
General Meeting of Shareholders
Appoints/dismisses
Management
AuditsNomination andRemuneration
Committee

Consultation

Board ofDirectors

ReportSelects/dismisses/Supervision
Business Execution

Appoints/dismisses

AuditsBoard ofCorporate Auditors

Appoints/dismisses

Liaises

Liaises

ReportAccounting
AuditorPresident & Group CEO
ReportDirection/Supervision

ReportCorporate Vice President
Compliance Committee
Divisions &Group Companies

ReportDivisions

Direction/SupervisionInternal Audit Office

Audits
Liaises

AuditsGroup Companies

Board of Directors
NSK has a board of directors composed of six directors (including two female directors), which is positioned as the
management decision-making organization, and thus judges and makes decisions regarding matters important to
our Group. Furthermore, of the six directors, three are outside directors, creating a structure that can demonstratesupervisory functions.
The Board of Directors holds regular meetings, as well as irregular meetings as required, at which decisions are madeon key management issues and work execution is supervised. The Board of Directors meetings are attended by, infunctions.

Board of Corporate Auditors

Governanceaddition to the six directors, the three auditors, who provide their opinions as appropriate to help strengthen our audit

We have a board of corporate auditors composed of three auditors (all of whom are outside auditors). Based on theaudit plans set by the Board of Corporate Auditors, members will attend Board of Directors meetings, exchange opinions with the accounting auditors and internal Audit Department, and carry out other activities to audit management
activities, including the directors’ performance of their duties.

110Nomination and Remuneration Committee
As a voluntary advisory body to the Board of Directors, NSK has established the Nomination and Remuneration
Committee that strengthens fairness, transparency, and objectivity of nomination and remuneration for directors. It iscomprised of one internal director and two outside directors, for a total of three members. The committee deliberates
on matters regarding the nomination and remuneration of directors, subsequently submitting reports to the Board of
Directors.

Evaluation for the effectiveness of directors
Regarding the effectiveness of directors, we conduct self-evaluation by questionnaire surveys of the directors andauditors. As a result of analysis and evaluation of the effectiveness of the Board of Directors, we confirmed that theBoard of Directors of our company was appropriately managed, and the effectiveness was thoroughly ensured.
In 2021, a lack of agenda items was raised as an issue, and NSK worked to raise the quality of discussions by increasing
conversation related to medium- and long-term management issues and strategies. In 2022, a lack of information
provided to outside directors was raised as an issue, and we implemented measures with the objective of promoting
understanding of NSK by newly-appointed directors.
We shall continue to conduct evaluations so that the Board of Directors strengthens its functions.
Skill matrix for the company’s directors and auditors
Corporate
management

Global

Production/
Manufacturing

Research/
Development

Sales/
Marketing

Finance/
Account

President &Group CEOEiichi Nakanishi

•

•

•

•

•

CEO
Kensuke Nakanishi

•

•

•

•

•

Director
Masataka Suzuki

•

•

•

•

•

Outside director
Yuji Nonagase

•

•

•

•

Outside director
Yukiko Araki••

Outside director
Chika Shiomi

•

•

•

Outside auditor
Hideki Toyotama

•

•

•

Outside auditor
Yuji Sawada•

Outside auditor
Yoshihiro Maki

•

•

ESG/
Sustainability

•

•

•

•
•

•

•

•
•

•
•

•

Legal Affairs/
Compliance

•

•
•

•

Governance111

Officers’ Remuneration
Amounts such as the remuneration for the Board of Directors are determined by the Board of Directors in considerationof the performance and execution of each director, the company’s performance, and the economic situation.
Remuneration for NSK directors (excluding outside directors) is based on a remuneration structure that incorporates
shareholder profits to ensure that it adequately functions as an incentive to work toward sustainable improvement incorporate value. In determining remuneration for each director, the basic policy is to provide an appropriate level inview of duties and responsibilities, with fixed remuneration, performance-linked remuneration, and non-monetary
remuneration. Additionally, remuneration for outside directors only consists of fixed remuneration since they are ata standpoint independent from business execution. Basic policy for remuneration for directors (excluding outside
directors) is as follows.
1. Policy on fixed remuneration
Fixed remuneration shall be determined in comprehensive consideration of the status of duties and execution of eachdirector and the business results of the company, etc.
2. Policy on performance-linked remuneration
Performance-linked remuneration shall be determined based on the level of achievement (business results indices)
according to the duties of each director. Business results indices shall be net sales, EBITDA, and ROE.
3. Policy on non-monetary remuneration
Non-monetary remuneration shall be comprised of stock options and restricted stock, with the number of sharesallotted determined based on the position, duties, etc., of each director.
4. Policy on ratio of remuneration, etc.
Regarding the ratio of remuneration, etc., the policy shall be to ensure that the ratio is the most appropriate for the
purpose of contributing to the sustainable improvement of corporate value.
5. Policy on allotment timing and conditions for remuneration, etc.
Based on each policy, fixed remuneration shall be provided monthly and performance-linked remuneration shall be
provided annually. Stock options and restricted stock shall be provided annually.
6. Matters concerning delegation of determining remuneration, etc.
The content of remuneration, etc., for individual directors shall be deliberated by the Nomination and Remuneration
Committee and subsequent to receiving its report, determined by the President & Group CEO.
Amounts such as the remuneration for auditors are determined by a meeting of the Audit and Supervisory Board andare set to be within the remuneration limits approved by a resolution of the General Meeting of Stockholders.

Officer category

Total
remuneration,etc. (1,000 yen)

Total amount per type of remuneration, etc. (1,000 yen)Basicremuneration

Stock
options

Bonuses

Retirementpay

No. of eligible
officers(persons)

Directors(excluding outside directors)

252,956

206,824

46,132--

3

Audit and Supervisory
Board members(excluding outside directors)

-

-

-

-

-

-

31,89931,899---6

Outside officers

GovernanceTotal amount, remuneration, etc. for each officer category by type of remuneration, etc.
and number of eligible officers (2022)

112

Internal Control
In accordance with the Companies Act and the Ordinance for Enforcement of the Companies Act, NSK’s Board of
Directors passes resolutions on the development and operation of the system (the internal control system) to ensure
the appropriateness of the operations of the corporate group (hereafter, “our Group") that comprises NSK and our subsidiaries, working to ensure the appropriateness of our operations as well as improve and strengthen our management
systems. We strive to improve corporate value by carrying out sound business operations through the enhancementof internal control.

Operation of the General Meeting of Shareholders
Voting Rights
NSK has stipulated in its Articles of Association that resolutions for the election of directors shall be adopted by amajority of the voting rights of shareholders present at a meeting where shareholders holding one-third or more of
the voting rights of shareholders who are entitled to exercise their voting rights are present. In addition, the Articles of
Association stipulate that resolutions for the election of directors shall not be made by cumulative voting.

Governance113

Compliance
Compliance Behavioral Guidelines
NSK’s mission is “To create ‘brilliant progress’ via innovative ‘grinding technology.’” To achieve this, we develop, manufacture, and sell high quality products centered around our core ultra-high-speed rotary technology. We contributesocially significantly in the three domains of dental, medical, and industrial, providing products and services in 135
countries around the world. In order to achieve our corporate mission and contribute sustainably to society, we haveset out Compliance Behavioral Guidelines which all officers and employees must comply with in their daily work.
In addition, we require all our overseas bases to comply with the laws and regulations of each country in our Group
Governance Code.

Compliance Behavioral Guidelines

1.Respect for Human Rights
We respect the human rights of every person and do not accept any form of discrimination (suchas gender, age, nationality, race, ethnicity, ideology, belief, religion, birth, education, disabilities,
illness and marital status). In addition, we treat everyone with the same respect and dignity.
2. Compliance with Laws and Regulations
We comply with laws, internal regulations and rules, and other social norms, and conduct
corporate activities in a fair and sound manner.
3. Responsibility to Society
We act with a social conscience and take a firm hand against all forms of illegal and antisocial
behavior.
4. Positive Workplace Environments
We strive to create workplaces that are easy to work in and encourage good interpersonal
relationships, respecting the character and personalities of each of our officers and employees.
Concerned about how others feel, we ensure personal privacy is protected.
5. Safe, Healthy Workplace Environments
We strive to create workplaces that prioritize the safety and health of each officer andemployee, working to achieve safe, comfortable workplace environments where people canwork healthy in both mind and body.

We do not permit any form of harassment, including sexual or power harassment.
7. Respect Diversity of Human Capital
We aim to be a workplace which respects diversity and where each officer and employee canGovernance

6. Preventing Harassment

work with enthusiasm.
8. Dedication to the Job
We dedicate ourselves sincerely to our jobs, following the set procedures and correctly
understanding work-related directives and orders. In addition, we follow laws, regulations, andsocial norms and ethics, always carrying out our work with a high awareness of ethics.

1149. Making Products
In order to contribute to society through providing top-quality products using innovative,
advanced technologies, our core principle is to not make defective products, and to always
deliver them at the promised time. We listen sincerely to opinions from our customers andsociety regarding our products and services, comply with all relevant laws and regulations,
including those relating to medical devices, strive to maintain and improve the quality of our
products, and work towards being able to provide a stable supply at fair prices.
Our research and development is carried out independently and sincerely, based on a highsense of ethics and scientific facts.
10. Healthy Corporate Activities
We respect our suppliers and other business partners as equal partners based on the principleof good faith, aiming for mutual prosperity and practicing sincere, fair, and equitable corporate
activities. In addition, we do not carry out any unfair or improper activities that take advantage
of our superior position.
11. Fair Business Activities
We comply with competition law (the Anti-Monopoly Act in Japan), laws and regulations
relating to import and export control, and other laws and regulations, striving to earn the trustof society and improve our corporate and brand images through fair, free and lawful businessactivities.
12. Effective Use and Protection of Company Assets
We strive for the effective and efficient use of both tangible assets, such as our land, buildings,
and facilities, and intangible assets, such as patents, copyrights, and expertise. We manage
these appropriately and will not use them for anything other than business purposes, including
for personal use. In addition, even for business use, we do not use or provide them for politicalactivities without the approval of the company.
We strive to manage our assets in order that payments to outside be both fair and appropriate.
13. Protection of Intellectual Property Rights
We respect the intellectual property rights of third parties, and do not obtain the results of third
parties unfairly, nor use them in our businesses. In addition, we require our business partners toalso comply with intellectual property laws.
14. Ensuring Information Management
We carefully manage information related to business or work, and ensure that management
secrets are not leaked and that personal information is handled in compliance with the laws andregulations.
15. Appropriate Information Disclosure
We disclose corporate information, such as our business activities or the state of ouraccordance with the relevant laws and regulations.
16. Prohibition of Insider Trading
We do not use unpublished key information (such as information that could affect company

Governancemanagement, at the appropriate time, accurately, and in a way that is easy to understand, instock prices) for the gain of either ourselves or third parties.
17. Prohibition of Conflicts of Interest and Mixing Public and Private
We carry out our company work sincerely, and do nothing that would go against the company’s
interests. In addition, we make clear our position as a company and the positions of individuals,
and do not do anything that would bring in personal stakes into the company or utilize thecompany’s position.

115

18. Opposition to Antisocial Forces
We take a firm and organized stance against antisocial forces and groups that threaten theorder and safety of civil society, and will not provide them with benefits of any sort. In addition,
we cooperate with investigating authorities to the fullest extent provided by law.
19. Contributions to Local Communities
We aim to become a member of our local communities, always contributing to them bycarrying out corporate activities that are rooted in the region. In addition, we actively carry out
exchanges with local communities.
20. Preventing Bribery and Corruption
We never offer inappropriate gifts or entertainment of any kind. Nor do we ever receive
inappropriate gifts or entertainment of any kind.
21. Donations and Aid
We provide donations and aid responsibly, with full awareness of their necessity andappropriateness, as a company that exists as part of society.
22. Environmental Protection
We are aware that the protection of the global environment is one of the most important issues
for the entire human race, and that this protection is a vital requirement for our existence andactivities as a company. To that end, we give consideration to the protection of the regional andglobal environment in every field of our corporate activities.
23. Monitoring Human Rights Issues across the Supply Chain
We monitor human rights issues in the supply chains that feed us the parts and raw materials
for our products, and strive to comply with the laws and regulations.

Initiatives
Compliance Promotion Structure
NSK has established a Compliance Committee chaired by the President and Group CEO, and its activities work toward
resolving compliance issues such as monitoring and supervision of the state of compliance with laws and regulations
and implementation of compliance education.

A compliance newsletter is issued monthly for all employees in an effort to improve compliance awareness within thecompany. Additionally, by periodically distributing commentary on the Compliance Behavioral Guidelines, we aim to
improve the understanding of its content. On an individual level, NSK conducts education on overall compliance andGovernance

Education

training for managers via e-learning with the objective of thorough observance of compliance.

Preventing Corruption
In the Compliance Behavioral Guidelines, we specify the prevention of bribery and corruption. Our policy states that
we will never offer inappropriate gifts or entertainment of any kind and that we will never receive inappropriate gifts orentertainment of any kind. While providing internal education, we will work toward thorough compliance.

116

Preventing Child Labor and Forced Labor
NSK declares that child labor and forced labor are banned in its Business Partner CSR Guidelines. Setting either theminimum working age or the end of compulsory education, whichever is greater in that particular country or region,
as a condition for employment, we comply with laws and regulations stipulated by various countries and regions, andprohibit labor resulting from forced labor, indentured labor, slavery, and human trafficking, etc.

Preventing Harassment
At NSK, we strive to prevent infringements on human rights by providing training designed to prevent all forms ofharassment and ensuring people are fully versed with the correct knowledge for working. If an issue is discovered, weinvestigate the facts and deal with it in accordance with our company regulations.

Whistle-blower System
At NSK, since 2015 we have had a whistle-blower system which employees can discuss issues they have discoveredthat violate compliance. In addition to this company system, we have an external office set up by a lawyer to ensurethat reports can be made in complete confidence.
The facts of the reported content are investigated and dealt with.

Appropriate Relationships with Medical Workers
NSK complies with the regulations set by the Japan Federation of Medical Devices Associations (JFMDA) and theJapan Fair Trade Council of the Medical Devices Industry, and with our internal regulations and employee behavior
policies, to carry out corporate activities that maintain high ethical standards.
With the goal of achieving a broad understanding of how we contribute to the development of the life sciences, including medicine and medical engineering, and promote corporate activities that ensure a higher standard of ethics,
in compliance with the JFMDA’s “Transparency Guidelines for the Medical Device Industry and its Relationships with
Medical Institutions and Other Organizations,” NSK publishes information about our corporate activities related to
medical institutions and medical personnel.

Dealing with Antisocial Forces
NSK takes a firm and organized stand against antisocial forces and groups that threaten the order and safety of civilsociety, and will not provide them with benefits of any sort. In addition, we cooperate with investigating authorities tothe fullest extent provided by law.

Governance117

Risk Management
Basic Approach
Changes to the world situation and the globalization of business mean that the business environment is changing
rapidly, and we are seeing a greater variety of risks that could impact our business activities. This is why NSK carries out
appropriate initiatives towards minimizing risks that could have major impacts on our business activities. In addition,
to prepare for unexpected events such as natural disasters, we are also working on business continuity plans to either
continue operating or recover as quickly as possible after a disaster.

Risk Management System
We are constructing a system where, if there is an unexpected event that could have a major impact on NSK’s operations, it is promptly reported to the management team and the people responsible liaise with the related departments
to deal with the issue appropriately. In addition, we have established separate management systems, committees, andcouncils for major risks, and are working on understanding risks and appropriate responses.
Major Business Risks
1. Risks associated with a high proportion of exports
2. Legal regulations
3. Quality issues
4. Risks associated with restructuring the sales network
5. Risks associated with dependence on specific industries and increased competition
6. Risks associated with parts suppliers outside our Group
7. Risks of litigation
8. Risks of major natural disasters, infectious diseases, etc.

Initiatives
BCP Initiatives
NSK has a business continuity plan (BCP) in place to use in case of an emergency such as a major natural disaster. This
plan sets out the systems, rules, responding organizations, recovery priority steps, and so on needed to minimize theeffects on our employees, customers, local people and all other stakeholders and to recover business promptly.

NSK carries out regular drills in order to implement its BCP in the event of a disaster, verifying its effectiveness andmaking improvements to the plan in a PDCA cycle. In addition, we are working to ensure the effectiveness of our disaster measures by, for example, providing hazard maps, maintaining an emergency contact network, and maintaining

GovernancePreparations for Major Disasters

a safety confirmation system to collect information on the safety of employees and their families in the event of adisaster.

118

Infectious Disease Measures
At NSK, we are working to prevent employees from being infected by ensuring compliance with the “new normal”
directed by the government as a way to deal with the COVID-19 pandemic. In addition, we consider stable supply of
products and continued service for our customers to be two of the most important issues, so the entire company,
especially the Manufacturing Division and the Sales Division, will respond to ensure customer needs are met.

Cybersecurity
NSK works to ensure information security throughout our entire company by establishing a Basic Cybersecurity Policythat protects information received from customers and our own information assets from threats such as accidents,
disasters, or crime, allowing us to enjoy the trust of our customers and society. Specifically, we are maintaining andimproving information security levels based on rules that regulate personal measures, information asset management,
physical measures, access control and authentication, use of IT equipment and software, system development andmaintenance, IT infrastructure operation and management, information security incident response and business
continuity management. In addition, we have established the Personal Information Protection Regulations to appropriately protect and appropriately handle the personal information of our customers and other stakeholders, and strive
to adhere to them.

Governance119Tax Transparency
Tax Policy
NSK has established a Basic Tax Policy to carry out tax work ethically, based on sincerity and fairness.

Basic Tax Policy

1. Tax Compliance
We will carry out our tax work ethically, based on sincerity and fairness, to ensure that it does
not violate legal or social standards. This is done through understanding and compliance withthe guidelines prepared by the Organisation for Economic Co-operation and Development(OECD) and the laws, regulations, etc. related to taxes in the various countries and regions
Group companies do business in.
2. Transfer Price Taxation Compliance
We will strive to pay taxes appropriately in each country or region by setting internal Grouptransaction prices based on the guidelines prepared by the OECD and the laws, regulations,etc. related to taxes in the various countries and regions in order to achieve a fair distribution ofincome among Group companies in proportion to their contributions.
3. Tax PlanningWe will act based on the Base Erosion and Profit Shifting (BEPS) action plan prepared by theOECD, and will not take any actions designed to avoid paying tax that are not economicallyrational, such as the transfer of profits to lightly taxed countries (tax havens).
4. Relationship with Tax Authorities
We will strive to build and maintain healthy relations with the tax authorities in each country or
region through the appropriate and timely presentation of information during tax administration
procedures and tax inspections. In addition, we will strive to deal appropriately and promptlywith issues pointed out during tax inspections, and make improvements.

Governance120

Interviews with Outside Directors
Yuji Nonagase
NSK is gradually developing systems for the SDGs. At the point where new products aredeveloped, the company is now considering product structure and packaging materials as
well. So we can see progress being made at this point.
The most important thing is to meet the needs of dentists and physicians. Moreover, what’s
important is to contribute to providing top-class medical care to patients. In line with our
corporate philosophy of “Our Core”, we are required to take a total, bird’s eye view of ourcustomers, who are people working in treatment facilities and their patients, and to take
into account sustainability.
It is important to share our values globally, improving satisfaction for all our stakeholders.
We need to move ahead with creating organizations that recognize diversity, bringing together a diverse range of human resources, and connecting this to a corporate culture thatoffers ample motivation. Being able to establish a foundation as a company that has grownfrom a medium-sized enterprise in a very short time is bound to form the basis for further
growth in the future.
Our system to consider the dental health of employees is unique, and helps us have a dialogue with the market. I feel we should be striving to enhance our measures even further.

Yukiko Araki
Expectations for corporate value creation have reached a wider and further diversifying
audience, expanding beyond shareholders and investors to include customers, employees,
local communities, and more. NSK has held the mission of creating “brilliant progress” via
innovative “grinding technology” from days long past as we maintain our commitment tostrive to be a company with an elevated social value. We’ve taken the issuance of our Sustainability Report as an opportunity to clarify eight fields of materiality in relation to our corespirit, management strategy, and way of doing business, and have been steadily working on
setting targets, ensuring internal penetration, implementing measures, and disclosing thisinformation outside the company. One example of the results of this commitment in an environmental aspect is our achievement of zero Scope1 and Scope2 CO2 emissions in a very
short time through active promotion of initiatives such as installing solar power systems at
our factories. It could be said that this accomplishment is the result of apt decisiveness inmanagement and an ability to act quickly.
At the same time, from this fiscal year, we have consolidated our materiality for sustainabilithat handles medical devices, we have declared our commitment to placing top priority
on the provision of products and services that contribute to the enhancement of people’s
health through advanced technology while further clarifying our focus on efforts as acompany to ensure safety and quality. In dedicating ourselves to clearly demonstrating our

Governancety into five fields, clarifying our direction and making it more understandable. As a company

integrated strategy for management and sustainability both internally and externally, going
forward, I expect this movement to continue to provide a foundation for dialogue between
the company and external stakeholders, and further contribute to society through betterbusiness.

121

Chika Shiomi
It has been a significant period of time since the importance of sustainability management
has been called into discussion, and I imagine many companies have gained an awarenessof the actual difficulty of undertaking these actions in a sustainable manner. NSK is facingthese difficulties as well. However, as a result of steadily developing activities while including materiality in the annual plans and targets of each department, our ratings from ESG
evaluation organizations are gradually improving. We expect to keep a strong hold on thiscommitment in our business activities moving forward.
In addition, we’ve implemented a review of our materiality, which we take as a demonstration of our posture toward responding to stakeholders’ expectations for NSK in a timely
manner. In particular, defining our commitment to “provide peace of mind and safety to
medical workers” as one of our themes is greatly valued for showing a strong awareness ofthe significant societal roles and responsibilities that we have taken on in the manufacturing and sales of medical devices.
There is currently substantial room for improvement in the social and governance aspectsof ESG at NSK. However, we take these “points for improvement” as “potential for growth,”and I expect us to work together as “One Team,” from management to the factory floor, insharing the “importance and significance of sustainability management” in our businessactivities.

Governance

122

GRI Standards Content Index

GRI Standards Content Index
General Disclosures
GRI Standards
GRI 2:
General Disclosures 2021

Disclosures

Sustainability Peport

Numberpage

1. The organization and its reporting practices
2-1

Organizational details

P.6

Company Profile

2-2

Entities included in the organization’s sustainability
reporting

P.2

Editorial Policy

2-3Reporting period, frequency and contact point

P.2

Editorial Policy

2-4

Restatements of information-

Not applicable

2-5

External assurance

P.63

GHG Calculation Report, Third-party Assurance
Report (PAS 2060)

2. Activities and workers
2-6

Activities, value chain and other business relationships

P.8

Business Domain

2-7

Employees

P.28

Employee Data

2-8

Workers who are not employees-

3. Governance
2-9

Governance structure and composition

P.110

Corporate Governance

2-10

Nomination and selection of the highest governance
body

P.110

Corporate Governance

2-11

Chair of the highest governance body

P.110

Corporate Governance

2-12

Role of the highest governance body in overseeing
the management of impacts

P.110

Corporate Governance

2-13

Delegation of responsibility for managing impacts

-

2-14

Role of the highest governance body in sustainability
reporting

P.13

Sustainability at NSK

2-15

Conflicts of interest

P.110

Corporate Governance

2-16

Communication of critical concerns

P.116
P.118

Compliance Promotion Structure
Risk Management

2-17

Collective knowledge of the highest governance body

P.110

Corporate Governance

2-18

Evaluation of the performance of the highest
governance body

P.111

Evaluation for the effectiveness of directors

2-19

Remuneration policies

P.112

Officers’ Remuneration

2-20

Process to determine remuneration

P.111

Nomination and Remuneration Committee

2-21

Annual total compensation ratio-

4.Strategy, policies and practices
2-22Statement on sustainable development strategy

P.3

TOP Message

2-23

Policy commitments

P.114

Compliance Behavioral Guidelines

2-24

Embedding policy commitments

P.116

Initiatives

2-25

Processes to remediate negative impacts

P.116

Initiatives

2-26

Mechanisms for seeking advice and raising concerns

P.117

Whistle-blower System

2-27Compliance with laws and regulations-

Not applicable

2-28

Membership associations

P.26

Responsible Marketing

P.26

Lectures and Provision/Release of Information to
Medical Professionals

P.29

Human Capital Development

P.34

Conducive Workplace Environments

P.26

Responsible Marketing

P.49

Relationships with the Local Community:
Social Contribution Activities

5. Stakeholder engagement
2-29

GRI 3:
Material Topics 2021

Approach to stakeholder engagement

2-30

Collective bargaining agreements-

3-1

Process to determine material topics

P.17

Materiality for Sustainability Promoted by NSK

3-2

List of material topics

P.17

Materiality for Sustainability Promoted by NSK

3-3

Management of material topics

P.17

Materiality for Sustainability Promoted by NSK

124

Economic
GRI Standards

Disclosures
Number

GRI201:
Economic Performance2016

GRI 202:
Market Presence 2016

Sustainability Peport
page

201-1

Direct economic value generated and distributed

P.7

Financial Results

201-2

Financial implications and other risks andopportunities due to climate change

P.57

Identifying Environmental Risks and Opportunities

201-3

Defined benefit plan obligations and other retirement
plans

P.37

Employee benefits

201-4

Financial assistance received from government

-

202-1

Ratios of standard entry level wage by gendercompared to local minimum wage

-

202-2

Proportion of senior management hired from the local
community-

Infrastructure investments and services supported-

Significant indirect economic impacts

-

203-1
GRI 203:
Indirect Economic Impacts
203-2
2016
GRI 204:
Procurement Practices
2016

204-1

Proportion of spending on local suppliers

P.49

Social Contribution Activities

GRI 205:
Anti-corruption 2016

205-1

Operations assessed for risks related to corruption

-

205-2

Communication and training about anti-corruption
policies and procedures

P.26

Responsible Marketing

P.47

Responsible Supply Chain

P.116

Preventing Corruption

205-3

Confirmed incidents of corruption and actions taken-

Not applicable

GRI 206:
Anti-competitive Behavior
2016

206-1

Legal actions for anti-competitive behavior, antitrust, and monopoly practices-

Not applicable

GRI 207:
Tax 2019

207-1

Approach to tax

P.120

Tax Transparency

207-2

Tax governance, control, and risk management

P.120

Tax Transparency

207-3

Stakeholder engagement and management ofconcerns related to tax

P.120

Tax Transparency

207-4

Country-by-country reporting-125

Environmental
GRI Standards

Disclosures
NumberGRI 301:
Materials 2016

301-1
301-2

GRI 302:
EnergyGRI303:
Water and Effluents 2018

GRI 304:
Biodiversity 2016

GRI 305:
Emissions 2016

GRI 306:
Waste 2020

GRI 308:
Supplier nvironmental
Assessment 2016

Sustainability Peport
page

Materials used by weight or volume

P.65

State of Environmental Impact of Business Activities

P.93

Effective Use of Resources

Recycled input materials used

-

301-3

Reclaimed products and their packaging materials

-

302-1

Energy consumption within the organization

P.65

302-2

Energy consumption outside of the organization

-

302-3

Energy intensity

P.65

State of Environmental Impact of Business Activities

302-4

Reduction of energy consumption

P.62

Environmental Activity Results for FY2022

302-5

Reductions in energy requirements of products andservices-

303-1

Interactions with water as a shared resource

P.102

Conserving Water Resources

303-2

Management of water discharge-related impacts

P.102

Conserving Water Resources

303-3

Water withdrawal

P.65

State of Environmental Impact of Business Activities

303-4

Water discharge

P.65

State of Environmental Impact of Business Activities

303-5

Water consumption

P.65

State of Environmental Impact of Business Activities

304-1

Operational sites owned, leased, managed in, or
adjacent to, protected areas and areas of highbiodiversity value outside protected areas

-

304-2

Significant impacts of activities, products, andservices on biodiversity

-

304-3

Habitats protected or restored

P.104

304-4

IUCN Red List species and national conservation list
species with habitats in areas affected by operations

-

305-1

Direct (Scope 1) GHG emissions

P.67

Controlling Climate Change

305-2

Energy indirect (Scope 2) GHG emissions

P.67

Controlling Climate Change

305-3

Other indirect (Scope 3) GHG emissions

P.67

Controlling Climate Change

305-4

GHG emissions intensity

P.79

Company-wide Initiatives

305-5

Reduction of GHG emissions

P.79

Company-wide Initiatives

305-6

Emissions of ozone-depleting substances (ODS)

P.95

Managing Ozone Depleting Substances

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions

P.97

Reducing Emissions into the Atmosphere306-1

Waste generation and significant waste-related
impacts-

306-2

Management of significant waste-related impacts

-

306-3

Waste generated

P.84

Effective Use of Resources

306-4

Waste diverted from disposal

P.84

Effective Use of Resources

306-5

Waste directed to disposal

P.84

Effective Use of Resources308-1

New suppliers that were screened using
environmental criteria

P.99

Green Procurement

308-2

Negative environmental impacts in the supply chain
and actions taken

P.99

Green Procurement

State of Environmental Impact of Business Activities

Biodiversity Preservation

126

SocialGRI Standards

Disclosures
NumberGRI 401:
Employment 2016

Sustainability Peport
page

401-1

New employee hires and employee turnover

P.28

401-2

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

-

401-3

arental leave

P.35

GRI 402:
Labor/Management
Relations 2016

402-1

Minimum notice periods regarding operationalchanges-

GRI 403:
Occupational Health and
Safety 2018403-1

Occupational health and safety management system

P.38

Occupational Safety and Health & Health Management403-2

Hazard identification, risk assessment, and incident
investigation

P.38

Occupational Safety and Health & Health Management403-3

Occupational health services

P.38

Occupational Safety and Health & Health Management

403-4

Worker participation, consultation, andcommunication on occupational health and safety

P.38

Occupational Safety and Health & Health Management

403-5

Worker training on occupational health and safety

P.38

Occupational Safety and Health & Health Management

403-6

Promotion of worker healthP.40

Health and Productivity Management

403-7

Prevention and mitigation of occupational healthand safety impacts directly linked by business
relationships

P.38

Occupational Safety and Health & Health Management

403-8

Workers covered by an occupational health and safety P.38
management system

Occupational Safety and Health & Health Management

403-9

Work-related injuries

P.38

Occupational Safety and Health & Health Management403-10Work-related ill healthP.38

Occupational Safety and Health & Health Management

404-1

Average hours of training per year per employee

-

404-2

Programs for upgrading employee skills and transition P.30
assistance programs

404-3

Percentage of employees receiving regularperformance and career development reviews-

GRI 405:
Diversity and Equal
Opportunity 2016405-1

Diversity of governance bodies and employees

P.28

405-2

Ratio of basic salary and remuneration of women tomen-

GRI 406:
Non-discrimination 2016406-1

Incidents of discrimination and corrective actions
taken

-

GRI 407:
Freedom of Association
and Collective Bargaining
2016

407-1

Operations and suppliers in which the right tofreedom of association and collective bargaining may
be at risk-

GRI 408:
Child Labor 2016

408-1

Operations and suppliers at significant risk forincidents of child labor

P.46

Respect for Human Rights

GRI 409:
Forced or Compulsory
Labor 2016409-1

Operations and suppliers at significant risk forincidents of forced or compulsory labor

P.46

Respect for Human Rights

GRI410:
Security Practices 2016

410-1

Security personnel trained in human rights policies orprocedures-

GRI 411:
Rights of Indigenous
Peoples 2016

411-1

Incidents of violations involving rights of indigenous
peoples-

GRI 413:
Local Communities 2016413-1

Operations with local community engagement,
impact assessments, and development programs

P.49

413-2

Operations with significant actual and potential
negative impacts on local communities-

GRI 414:
Supplier Social
Assessment 2016414-1

New suppliers that were screened using social criteria -414-2

Negative social impacts in the supply chain andactions taken

P.47

GRI 415:
Public Policy 2016

415-1

Political contributions-

GRI 416:
Customer Health and
Safety 2016

416-1

Assessment of the health and safety impacts ofproduct and service categories

P.22

416-2

Incidents of non-compliance concerning the healthand safety impacts of products and services-

GRI 417:
Marketing and Labeling
2016

417-1

Requirements for product and service informationand labelingP.26

Responsible Marketing

417-2

Incidents of non-compliance concerning product andservice information and labeling-

Not applicable

417-3

Incidents of non-compliance concerning marketing
communications-

Not applicable

GRI 418:
Customer Privacy 2016

418-1

Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data-

Not applicable

GRI 419: Socioeconomic
Compliance 2016

419-1

Non-compliance with laws and regulations in thesocial and economic area-

Not applicable

GRI 404:
Training and Education
2016

Employee Data

Human Resource System Supporting Diverse Working
StylesTraining & Education System

Employee Data

Social Contribution Activities

Responsible Supply Chain

Quality, Customer Service and Product Responsibility

127

23.09.EN