Nissha Sustainability Report 2022
EnglishContents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Table of Contents
Table of Contents / Editorial Policy
Editorial Policy

Human Rights
1

Nissha Group Sustainability

Human Rights

Governance11

Human Resources

CEO Message

2

Human Resources System

12-1

Nissha Philosophy

3-1

Respect for Diversity

12-2

Sustainability Vision

3-2

Human Resources Development

12-3

Nissha's Value Creation Process

3-3

Employee Engagement

12-4

Promotion Framework for Sustainability

3-4

Safety and Health of Employees

12-5

Materialities (Key Issues) and KPIs

3-5

Initiatives in which Nissha Participate and External
Evaluation

3-6

Nissha Group Stakeholders

3-7

Along with Local Communities

3-8

Environment
Environmental Policy and Management Structures4

Impact on the Environment out of Our Business
Operations

5

Responding to Climate Change(Addressing the TCFD Recommendations)

6

CO2 Emissions and Reduction Efforts

7

Waste Management

8

Management of Chemical Substancesand Environmental Risks

9

Environmental Objectives and Status of Achievement(Nissha Group in Japan)

10

Nissha Sustainability Report 2022

Fair Operating Practices
Initiatives Related to Information Security

13

Initiatives Related to Intellectual Property

14

Trade Management

15

Partnership with Our Suppliers

16

Quality Management /Efficiency and Productivity Improvement
Quality Management

17-1

Efficiency and Productivity Improvement

17-2

Corporate Governance18

Initiatives of Internal Audit Office

19Internal Control System

20

Risk Management and Compliance21

Initiatives Related to Anti-corruption

22

Business Continuity

23

Tax Principle

24

Initiatives Related to Conflict Minerals

25

Management System and Other Certification
Acquisitions

26

Third Party Verification /GRI Standards Content Index / ESG Data
Third Party Verification

27

GRI Standards Content Index

28

ESG Data

29

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

1. Editorial Policy
The Nissha Group believes that appropriate information disclosure and communication with stakeholders are important. The Nissha Report, an integrated report, comprehensively provides financial
and non-financial information to shareholders, investors, and other stakeholders, including thecompanyʼs initiatives for sustainable corporate growth. The Nissha Sustainability Report (this report)
is published once a year to provide comprehensive and detailed information on non-financial information.

1-1

Guidelines Used as Reference• The GRI Sustainability Reporting Standards• ISO26000• Environmental Reporting Guidelines 2018, issued by the Japanese Ministry of the Environment

Sustainability Report 2022 covers our initiatives and performance in the fiscal year ended December
2021 (January–December 2021), following the editorial policy given below.

The Role of Nissha Sustainability Report

1-2

Period Covered

From January 2021 to December 2021

1-3

Publication Dates

Current issue: June 2022 for Japanese, August 2022 for English
Last issue: June 2021 for Japanese, August 2021 for English
Next issue: June 2023 for Japanese, August 2023 for English (planned)

1-4

Scope of Reporting

The information and data contained in this report focus mainly on activities conducted by the Nissha Group. Where information for the entire group is not available, the scope of reporting is indicated separately. “Nissha” or “the Company” refers to “Nissha Co., Ltd.” while “Nissha Group” or “theGroup” collectively refers to the Group overall, including Nissha Co., Ltd. “Headquarters” or “Kyoto
Global Headquarters” refers to the headquarters and affiliated companies located within the headquarters premises. The major affiliated companies of each Nissha Group business are given below.
Significant activities conducted by companies in our supply chain are also included in this report.

Nissha Sustainability Report 2022

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Contents /Editorial Policy

1-5

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Major Affiliated Companies and Businesses

Companies

Major Businesses

Nitec Industries, Inc.

Industrial Materials

Nitec Precision and Technologies, Inc.

DevicesNissha FIS, Inc.

DevicesNissha Printing Communications, Inc.

OthersZonnebodo Pharmaceutical Co., Ltd.

OthersNissha Business Service, Inc.

OthersNissha USA, Inc.

Industrial Materials, Devices

Nissha Eimo Technologies

Industrial Materials

Nissha Medical Technologies

Medical Technologies

Nissha PMX Technologies,S.A. de C.V.

Industrial Materials

Nissha Europe GmbH

Industrial Materials, Devices

Nissha Schuster Kunststofftechnik

Industrial Materials

Nissha Back Stickers

Industrial Materials

Nissha Metallizing Solutions

Industrial Materials

Nissha Korea, Inc.

Industrial Materials, Devices

Nissha Industrial and Trading (Shenzhen) Co., Ltd.

Industrial Materials

Nissha (Kunshan) Precision IMD Mold Co., Ltd.

Industrial Materials

Guangzhou Nissha High Precision Plastics Co., Ltd.

Industrial Materials

Taiwan Nissha Co., Ltd.

Industrial Materials, Devices

Nissha Industrial and Trading Malaysia Sdn. Bhd.

Industrial Materials

Nissha Precision Technologies Malaysia Sdn. Bhd.

Industrial Materials

Nissha Vietnam Co., Ltd.

DevicesNissha Sustainability Report 2022

Fair Operating
Practices

1-6

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Major Changes in Reporting Scope

No major changes.

1-7

Publishing Division and Contact for Inquiries

Nissha Co., Ltd.
ESG / Corporate Strategy Planning
Contact: https://www.nissha.com/english/inquiry.html
TEL: +81 75 811 8111

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

2. CEO Message
Nissha Group is a forward thinking global company. Our Mission
is to realize the enrichment of peopleʼs lives by creating technology and developing it into economic and social value through thediverse capabilities, passion, and leadership of the global Nissha
Group. Nissha Group is developing the 3 businesses segments of"Industrial Materials", "Devices", "Medical Technologies", and also
developing various businesses such as “Information and Communication”, “Pharmaceutical”.
The Group views sustainability as initiatives toward the achieve-

ment of sustainable growth and development for both the company and society. Based on this approach, we consider social issues
to be business opportunities. We strive not only to leverage ourstrengths to provide products and services that help resolve theseon an ongoing basis, but also to strengthen the managementfoundation underpinning our business activities, reduce risks that
could hamper business continuance, and promote governance toensure these are all carried out appropriately. These activities will
create the economic and social values stated in our Mission, allowing us to realize the enrichment of peopleʼs lives.
The Group has set out where it wants to be by 2030 in the form of
our Sustainability Vision (long-term vision). We are aiming to create social value by providing products and services that contributeto solving social issues in the priority markets of medical, mobility,
sustainable materials and IT devices, and to achieve a 30% reduction in total CO2 emissions in 2030 (versus 2020) with a view to
becoming carbon-neutral by 2050.
In January 2022, we declared our support for the recommendations of the Task Force on Climate-related Financial Disclosures(TCFD) and we have analyzed the financial impact of climatechange-related risks and opportunities on our business. This reportanalyses and reports on the risks and opportunities associated withthe transition to a decarbonized society and the risks and opportunities posed by changes in the natural environment, based on therecommendation of the TCFD.
We look forward to your continued guidance and encouragement.
Junya Suzuki
Chairman of the Board,
President and CEO
Nissha Co., Ltd.

Nissha Sustainability Report 2022

Nissha Co., Ltd. support the United Nations Global
Compact since April 2012. We have in place various
targets and work actively based on the 10 principlesof the Global Compact in the area of human rights,
labor, the environment, and anti-corruption.

2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

3. Nissha Group Sustainability
3-1

Nissha Philosophy

Nissha has integrated its standards of thought, rules of conduct,and Mission̶ideals held in high regard ̶ into Nissha Philosophy that is greatly valued.

3-2

Sustainability Vision (long-term vision for 2030)

From our inception onward, throughout our 90-plus year history, we have grown by evolving and expanding our core technologies andreorganizing our target markets. Under our Mission, we have analyzed the magnitude of social issues and the sustainability of market
growth for the next 10 years, and relatively evaluated the added value that can be created through our core technologies. Based on thisanalysis, we have positioned Medical, Mobility, and Sustainable Materials as our growth areas.
Up to Present

We have so far promoted business expansion in the IT devices
market, which has grown dramatically, while enhancing our ability torespond on a global basis in both quality and quantity.At the sametime, primarily through M&A activities, we have been able tostrengthen our strategy of reorganizing our business portfolio by
acquiring and developing business platforms in Medical Devices,
Mobility, and Sustainable Materials. We have made inroads into
markets with stable growth prospects.

Sustainability Vision (Long-term vision for 2030)
With integration and orchestration of the diverse talents of ourpeople and our technologies, we will contribute to solving global
social issues in the priority markets of medical, mobility, andsustainable materials, and realize the enrichment of people's
healthy and affluent lives.

Social value
Solve social issues throughbusiness activities● Solve medical issues, realize safe
and comfortable mobility, andcontribute to a circular society● Reduce 30% of total CO
2emissions, in view of carbonneutral by 2050 (compared to2020)●

Economic value■ Mission

Aim for JPY 300 billion of net
sales（including JPY 150 billion
in medical business）● ROE 15%●

We realize the enrichment of peopleʼs lives bycreating technology and developing it
into economic and social value through the diverse capabilities,
passion, and leadership of the global Nissha Group.

IT Devices
Contributing to solving social issues through our capabilities cultivated for IT devices• Penetrate IT technology into society
through advancement of digital transformation

Nissha Sustainability Report 2022

MedicalMobility

Sustainable Materials

Solve medical issues

Realize safe and comfortable mobility

Contribute to a circular society• Reduce patient burden (QOL improvement)• Efficiency and labor saving in diagnosis
and treatment• Promote telemedicine (consultationand treatment)• Comfort: More comfort in interior space• Safety and Convenience: Improve communication between people and cars
• Sustainability: Reduce environmental
impact• Achieve carbon neutrality• Protection of the natural environment• Provision of petroleum-based plastic
alternative

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Contents /Editorial Policy

3-3

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Third Party Verification / GRI
Standards Content Index / ESG Data

GovernanceNissha's Value Creation Process

Nissha creates social and economic value that contributes tothe sustainable growth of both our company and society. We doso by leveraging our diverse management capital and delivering
products and services based on our competencies, focusing on
our priority markets.

Management Capital
Six Core
Technologies

Technical
Capabilities

Peripheraltechnologies
Ratio of overseas
employees

Diverse Human
Resources

Ratio of female
managers

M&A *11 projects

Competency

Target Marketst

CustomerInteraction

Globalbusinessfoundation

Production sites

Production

13

Equity ratio

Financial

Financial rating

BBB+(Stable)

JPY

Sustainability Vision
Economic Value

195.0

Dedicatedto customer
loyalty
Technologies
that earncustomers'
respect
Proven inquality andprocess
engineering2030 Net Sales

Medical Devices
Operating Profit

Medical

12.0

JPY

300 Billion

ROE 15%JPY
BillionDecorative Film, Molded Parts

Mobility

3-Year Cumulative
Operating CF

Social Value

53.0

JPY
BillionLeadershipat all levels

64

Customers
8,000 +

(The 7th Medium-term
Business Plan)

BillionDiversecapabilities
and synergies

thCountries

Medium-term Vision

Net Sales

Change for
growth

7 Medium-term
M&A
Business Plan Budget
Capabilities
JPY25.0billion+

Products and Services

ROE

Sustainable
Materials

Metallized Paper

9%or higher
Total asset
turnover ratio

1.0 or higher

IT Devices

Solve medical issues

Realize safe andcomfortable mobility

Sustainable Molded Parts
Operating profit
ratio

6% or higher
Equity ratio

Film-based Touch Sensors

Strengthening Management Foundation

45% or higher

Contribute to a circular society

Total CO2 30% reduction
emissions(vs. 2020)

Risk Reduction
Corporate Governance* Beginning with the 5th Medium-term Business Plan

Nissha Sustainability Report 2022

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Contents /Editorial Policy

3-4

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Promotion Framework for Sustainability

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Structure

Nissha has established a Sustainability Committee, chaired by the President and CEO with the Executive Vice President (Director of Sustainability) as the Vice-Chair. This committee is composed ofbusiness organizations, divisions, and the ESG task force related to the themes of Creating business
opportunities, Risk reduction, Strengthening management foundation, and Corporate governance,
and which all work in concert with each other.
The ESG task force has been established to address the themes of " Utilizing diverse human resources and improving human resource capabilities," "Respect for human rights," and "Responding
to climate change". These are considered to be particularly important from an ESG perspective, andthe task force is responsible for accelerating activities for each of these at Nissha.
The Sustainability Committee holds a general assembly once per year, in which it authorizes the
key performance indicators (KPI) and action items set by the main related business organizations,divisions, and the ESG task force based on the materialities determined through resolutions at
the Board of Directors. In addition, monthly business reviews and quarterly progress confirmation meetings are held to confirm whether or not the set KPIs and action items are progressing asplanned. Each business organization, division, and the ESG task force oversee the management ofrespective strategy items, KPIs, and action items. In the fiscal year ended December 2021, we held
one Sustainability Committee meeting and two Progress Review Meetings.
Note that in the fiscal year ending December 2022, the materialities that the Sustainability Committee had overseen until the fiscal year ended December 2021, including particularly importantrisk items for smooth business operation such as “Promotion of Compliance,” “Promotion of Healthand Productivity Management,” “Occupational Health and Safety,” “Advancement of Quality Control, ” “ Continuity of Business Activities, ” and “ Protection and Utilization of Information Assets, ”
were passed to the Risk Management and Compliance Committee, which was newly installed in thefiscal year ending December 2022. The new Committee is promoting activities to reduce risk.
Refer to 21. Risk Management and Compliance

Nissha Sustainability Report 2022

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Contents /Editorial Policy

3-5

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Materialities (Key Issues) and KPIs

3-5-1 Materiality Identification
To actualize our Sustainability Vision, the Nissha Group identifies particularly important items as
materialities. We also set and engage in specific strategy items, KIPs, and action items reverse-calculated to achieve 2030 goals.
Materialities are evaluated from the 4 perspectives of, Creating Business Opportunities, Risk Reduction, Strengthening Management Foundation, and Corporate Governance, using the two axesof "importance to society and stakeholders", and "importance to Nissha". In addition, we hold dialogues with stakeholders including customers, shareholders and investors, and include that feedback in "importance to society and stakeholders". The identified issues and their positioning within
the Group are discussed by the Sustainability Committee, and materialities are identified throughdeliberations and resolutions by the Board of Directors.

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Materiality Identification Process
STEP1
Identify related social
issuesIdentify social and management issues related to the realization of the Nissha
Group's Sustainability Vision by referencing SDGs*1, GRI Standards*2, RBA*3 ,
etc.

STEP2
Prioritize

Incorporate knowledge gained through dialogue with customers, shareholders,investors, and other stakeholders regarding the social and management issues
identified in Step 1, while analyzing and prioritizing on two axes: "importanceto society and stakeholders” (considering SDGs, external evaluation, etc.) and"importance to Nissha”

STEP3
Verify validity

Examine the validity of the priorities via interviews conducted with businessdivisions, Sustainability Committee subcommittees, ESG task force and otherorganizations.

STEP4
Establish materialities
and KPIs

Based on Steps 1 to 3, materialities are identified through deliberations andresolutions by the Board of Directors. In addition, business divisions, subcommittees, and the ESG task force incorporate strategy items and KPIs, which arethen approved by the Sustainability Committee.

*1 Sustainable Development Goals: Adopted by the United Nations in September 2015
*2 Global Reporting Initiative Standards: Global guidelines for sustainability reporting*3 Responsible Business Alliance: International code of conduct for labor, health and safety, environment, ethics, etc. for the electronics andother industries

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Evaluated and identified environmental and social risks that impede business continuity in aiming
to achieve Sustainability Vision

Items of high importance that were handled by the Sustainability Committee as materialities until
2021included promotion of compliance, promotion of health and productivity management, occupational health and safety, advancement of quality control, continuity of business activities, andprotection and utilization of information assets. These items are now handled by the Risk Management and Compliance Committee, which was newly established in 2022 to ensure smooth business operations and promote risk reduction activities.
Refer to 21. Risk Management and Compliance■ Creating Business Opportunities (Resolution of social issues through business)
Identified based on important social issues (needs) in the priority markets as stipulated in Sustainability Vision

Solving medical problems

Expansion of business for Medical
Devices / Healthcare market

Net sales of Medical Technologies segment

Creating Business Opportunities• Contribution to medical care centeredon minimally invasive (heart disease)and acute care fields

Contribute to the safety
and comfort of transportation and logistics,
and the reduction ofenvironmental impact

Expansion of business for Mobility
marketPromotion of circular
economyExpansion of business for Sustainable
Materials market

Nissha Sustainability Report 2022

Strategy Items

Respect for humanrightsReduction of labor and human rights
risks• Number of child labor andforced labor cases of primary
suppliers in areas with highlabor and human rights risks(Latin America, Southeast
Asia, China): 0

Responding toclimate change

Reduction of total CO 2 emissions by
30% by 2030 (compared to 2020)• Reduction of total CO 2 emissions by 9% (compared to
2020)

Providing responsible medical products and services

Establishment of management systems
for quality and safety of products and services• Continuation and expansionof ISO 13485 certification(number of certifications
obtained and maintained asplanned): 11

Strengthening the legal compliance system by thoroughly ensuring that employees understand medical-related laws andregulation• Continuous implementationof education for management
and all employees• Compliance with laws andregulations related to in formation disclosure (Pharmaceutical Machinery Law
Enforcement Regulations,
Appropriate Advertising Standards for Pharmaceuticals,etc.): 0• Appropriate disclosure of information about
products and services

Net sales of Mobility segment
Sustainable procurement• Providing mobility products that
contribute to safety, comfort, andreduction of environmental impact• Promotion of circular economy• Solving marine plastic pollution issues• Contribution to improving resource
utilization efficiency• Biodiversity conservation considerations

RelatedSDGs

Net sales of Sustainable Materials segment

KPIs and Action Items(2023)

Materialities

Risk Reduction

KPIs (2023)

Third Party Verification / GRI
Standards Content Index / ESG Data

continuity)

Nissha Group reviewed its materialities in January 2022. As sustainability becomes increasingly
important worldwide, we have taken into account changes in the environment that may affect ourbusiness. We then narrowed our focus to those items that are of particular importance to the realization of our Sustainability Vision.

Strategy Items

Governance■ Risk Reduction (Reducing environmental and social risks that impede business

3-5-2 Materialities of Nissha Group / KPIs and Action Items

Materialities

Quality Management / Efficiency
and Productivity Improvement

Establishment and operationalization of
stable procurement• Suppliers: Build appropriate supplier networkand healthy relationships• Procurement of goods: Ensure stable procurement of environmentally friendly goods
at reasonable prices, while preserving quality.
• Risk: Reduce procurement risk and strengthenrisk management capabilities• Procurement process: Establish and maintainan appropriate procurement process• Buyers: Improve and maintain buyersʼ expertise

Related
SDGs• 100% implementation rateof risk reduction measures for
major components (numberof risk reduction measures
implemented / number of key
components with high procurement risk)

3-5-2-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources■ Strengthening Management Foundation (Initiatives to support the creation ofbusiness opportunities and the reduction of risks) / Corporate GovernanceFair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Boundaries of Materialities (risk reduction, strengthening management founda-tion, corporate governance)

Identified major business foundation elements in the quest for actualizing our Sustainability Vision
and accelerating business activities
Materialities

Strengthening Management Foundation

Utilizing diverse human resources andimproving humanresource capabilities

Efficiency and productivity improvement

Strategy Items
Promote activities for women

KPIs and Action Items(2023)• Female manager ratio
Global consolidated: 21%
Nissha: 8%

Enhancement of trainings for management / strategic human resources, androtation• Selection rate of leadership
candidates
Nissha: 36%

Digitization of value creation process• Reduction of working hours
by automation and efficiency
tools such as RPA (compared
to 2020) by 100,000 hours /year• Bu sin ess flo w d igitiz a tion
(total number of projects developed from 2021 to 2023):
100

Corporate GovernanceOngoing technology creation• Establishment of a management system
based on a technology roadmap• Promote three technological synergies:
inter-business, inter-regional, and inter-generational• Number of verified new technologies consistent with business strategy: 5 (per year)

Global governance

Establish an internal control framework
along the business axis (vertical) and acooperative framework (RCC) along theregional axis (horizontal)• Expansion of RCC coverage(Expansion to regions outsideof Europe, the U.S. and China)

Nissha Sustainability Report 2022

Related
SDGs

Third Party Verification / GRI
Standards Content Index / ESG Data

GovernanceMaterialities

Boundaries
Inside Nissha Group

Outside Nissha Group

Respect for human rights●●

Responding to climate change●●

Providing responsible medical products and services●●

Sustainable procurement●●

Utilizing diverse human resources and improving human resource capabilities●

Efficiency and productivity improvement●

Ongoing technology creation●

Global governance●

3-5-2-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources■ Creating Business Opportunities

Solving medical problems

Strategy Items

KPIs

Achievement
Status*Expansion of business for Medical
Devices / Healthcare market

Net sales of Medical Technologies
business〇• Contribution to medical care centered on minimally invasive (heartdisease) and acute care fields

Contribute to the safety and comfort of transportation and logistics,
and the reduction of environmental impact

Expansion of business for Mobility
marketPromotion of circular economy

Expansion of business for the sustainable materials market

Solving social issues by applying
and integrating technologies

Net sales of Mobility segment• Providing mobility products that
contribute to safety, comfort, andreduction of environmental impact• Promotion of Circular Economy• Solving marine plastic pollution issues• Contribution to improving resource
utilization efficiency

Creation of new products that leadto the solution of social issues

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Risk Reduction

3-5-3 FY2021.12 Initiatives and Achievement Status

Materialities

Fair Operating
Practices

Net sales of Sustainable Materials
segment in Industrial Materials
business

Net sales of New
Business Development Office

Materialities

Strategy Items

KPIs and Action Items(2023)

Achievement
Status*Promotion ofcompliance

Enhancement of the internal reporting system

Set up an optimal contact
point for the entire company and establish an operational flow〇

• Draft operation proposals
for internal reporting systems taking into consideration surveys of laws andcase examples from othercompanies

Responding to domestic
and foreign legal risks

Understanding the risks ofindividual laws and regulations; education and retention.

〇• Implement training concerning the Whistleblower
Protection Act revisions
for Corporate Ethics andCompliance Promotion
Managers and Representatives• Implement classes for
medical devices, which are
an important market

Respect forhuman rights

Reduction of labor andhuman rights risks

Number of child laborand forced labor cases ofprimary suppliers in areas
with high labor and humanrights risks (Latin America,
Southeast Asia, China): 0〇• Using survey forms, survey
Nissha Group companies
both inside and outside ofJapan and make sure thenumber of forced laborand child labor cases iszero• Targeting all Nissha Groupsuppliers, check risk levels
across factors including region, purchase prices, andbusiness field, and complete survey target refining
and identifying

Promotion ofhealth andproductivity
management

Creating a workplace
where employees are
physically and mentally
healthy, highly motivated, and able to work
lively (improvement of
employee engagement)

Raising health awareness:
Hold a wellness day for employees once a month〇• Implement once monthly
from July to December
2021

〇

〇

△

* This shows the level of achievement of net sales plans for each segment in FY2021.12.

Initiatives in FY2021* 〇 means achieved, △ means partially achieved, and × means not achieved.

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Materialities

Strategy Items

KPIs and Action Items(2023)

Achievement
Status*Promotion ofhealth andproductivity
management

Creating a workplace
where employees are
physically and mentally
healthy, highly motivated, and able to work
lively (improvement of
employee engagement)

Early detection and treatment of illness: Improvement of the rate of detailed
health examinations (examination rate of 50% or
more)Workplace support in stresschecks: 100% attendance
and participation of subcommittee members inworkplace care interviews

Response to a
decarbonizedsociety

Occupational
health andsafetyReduce our total CO 2
emissions by 30%(versus 2020), with aview to becoming carbon-neutral by 2050.

Develop a plan to reduce
total CO2 emissions towardthe 2030 target, and reduce the prescribed CO 2
emissions by 2023.

Human Resources

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Initiatives in FY2021

Materialities

Strategy Items

KPIs and Action Items(2023)

Achievement
Status*〇• As a result of implementing awareness raising
activities through Nissha
Group intranet usage andcampaigns, the examination participation rate was
55.4%

Advancementof quality control

Reduction of quality
cost ratio

Quality cost ratio target:
3.0%

×• Quality cost ratio: Not
achieved• Quality costs rose due tolaunches for unrealized andnew products, etc. Analyze
and respond to quality costdetails〇• 100% participation.
Implement medical treatment guidance and advice
for each workplace byclinical psychologists andhealth staff• Select divisions randomly
and implement follow-up
meeting meetings

Improvement of quality
assurance system thatgains customers relianceContinuation and expansionof QMS certification〇• Maintain and expand
ISO9001 certification• Targeting all domestic
Japan production centers,
check quality control statusfocusing on workplaces
and the related objects

Pointing out and support
through internal audit〇• Implement internal auditing concerning international standards for important markets (ISO13485
and IATF16949)

Implementation of quality
education〇• Implement training for
curriculum as planned,
including applied training,
basic training, specialist
training, etc.

Improvement support forbusiness divisions such as
small group activities〇• Check progress and giveassistance to small scalegroups engaging in production progress improvement,with a focus on factories

Support for strengthening
quality system in strategic
priority areas〇• Implement quality training:
Targeting all domestic
Japanese production bases, check quality control
status, focusing on workplaces and related objects.
Execute field surveys bymanagement〇• Upwardly revise total July
2021 CO 2 emissions reduction rate from 20% to30%• Plan concrete measures forenergy conservation andenergy reuse• For overseas production
bases, implement awareness raising actions concerning climate change
response measures• Start surveying for Scope 3
Management

Reduction of occupational accidents

Number of occupational
accidents 7 or less×

• In FY2021.12, 15 labor
accidents occurred. Analyze causes, correct conditions for identified causes,
and implement reoccurrence prevention measures

Understand and reduce the health andsafety burden of newly
acquired companies
through M&A

Expand scope〇• For health and safety at
the hubs of the US Medical
Technologies businessacquired in FY2020.12,
implement assessment,
construct systems, and establish monitoring methods

Nissha Sustainability Report 2022

Fair Operating
Practices

Support for strengthening quality system instrategic priority areas(Medical, Mobility)

Initiatives in FY2021* 〇 means achieved, △ means partially achieved, and × means not achieved.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Materialities

Strategy Items

KPIs and Action Items(2023)

Achievement
Status*Providingresponsible medical
products andservices

Strengthening the legal
compliance system bythoroughly ensuringthat employees understand medical-related
laws and regulation• Ensuring the quality
and safety of products
and services• Appropriate disclosureof information about
products and services

Continuous implementation of education for management and all employees〇

Continuation and expansionof ISO13485 certification〇• The FY2021.12 periodic
review is over (No feedback
points)Compliance with laws andregulations related to information disclosure (Pharmaceutical Machinery Law
Enforcement Regulations,
Appropriate AdvertisingStandards for Pharmaceuticals, etc.)〇• Construct legal compliancesystems for domestic andforeign medical related
business areas

Response to infectious diseases〇• Revise internal company
COVID-19 response guidelines based on infection
spreading status and disseminate internallyImplementation of management BCP training and
BCP training at major domestic bases〇• Implement BCP training
targeting affiliated company (Nissha FIS, Inc.) andcheck the adequacy of BCP

Understanding the BCP operation and management
status of important bases〇• Implement BIA analysis
targeting affiliated company (Zonnebodo Pharmaceutical Co., Ltd.) and prepare manual concerning
important duties

Attendance rate of information security education for
all employees〇• E-learning class attendance rate for maintaining
information security promoter capacity: 100%

Continuity ofbusiness activities

Protection andutilization of
information
assetsExecute business continuity basic plan in caseof emergency• Strengthening security
in response to newwork styles• Strengthening andestablishing ISMS

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Initiatives in FY2021

Materialities

Strategy Items

KPIs and Action Items(2023)

Achievement
Status*• Implement training for
management and all employees as planned• Launch skill training forimportant markets

Protection andutilization of
information
assets• Strengthening security
in response to newwork styles• Strengthening andestablishing ISMS

Number of information security incidents〇• Compared to FY2020.12:
20% decrease

Expansion of ISMS application range to overseas
undeveloped departments△• Prioritized security authentication acquisition for important market (mobility),
did not implement entire
plan

Improving human resource
capabilities,
and utilizing
diverse humanresources

Enhancement of trainings for management/ strategic human resources, and rotation

Selection rate of leadership
candidates
Nissha: 36%〇

Promote activities for
women

Female manager ratios
Global consolidated: 21%
Nissha: 8%〇

Achieved FY2021.12 targets• Leader candidate selection
rates
Nissha: 31% (actual),
30% (target)• Female manager ratios
Global consolidated: 20%(actual), 19% (target)
Nissha: 6% (actual), 5%(target)Productivity
improvement

Digitization of value
creation process

Reduction of working hours
by automation and efficiency tools such as RPA(compared to 2020) by
100,000 hours / year〇

Achieved FY2021.12 targetof 30,000 hours (30,544
hours)• Introduce RPA on a global
basis• Execute move to digital
work flow for assorted internal company requests

Company-wide development of digitization of value
creation process〇• As one form of training
to cultivate the next generation of management,
hold classes on DX (digitaltransformation) and AI, anessential technology• Complete digitalization of
the design process for the
Industry Materials businessas planned

Initiatives in FY2021* 〇 means achieved, △ means partially achieved, and × means not achieved.

Nissha Sustainability Report 2022

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Contents /Editorial Policy

3-6

Nissha Group
Sustainability

Environment

Initiatives in which Nissha Participate and External Evaluation

3-6-1 Initiatives in which Nissha participate■ United Nations Global Compact

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

At Nissha Group, we have in place various targets based on
the 10 principles of the Global Compact and work daily towardachieving them with an eye to meeting the needs of global society. We disclose information about our activities in sustainability
reports, published on the Nissha Group website.

The Ten Principles of the UN Global Compact
Human Rights
Principle 1: Businesses should support and respect the protection ofinternationally proclaimed human rights; andPrinciple 2: make sure that they are not complicit in human rights
abuses.

LabourPrinciple 3: Businesses should uphold the freedom of associationand the effective recognition of the right to collective
bargaining;
Principle 4: the elimination of all forms of forced and compulsory
labour;Nissha Co., Ltd. support the United Nations Global Compact
since April 2012.
The Global Compact is a voluntary initiative based on 10 principles in the area of human rights, labor, the environment, andanti-corruption. Its purpose is to have various companies show
responsible and creative leadership, and thereby act voluntarily
as good citizens and participate in creating a global frameworkfor sustainable growth. Signatory companies are required toexpress within and outside the company the commitment of
top management, establish a CSR framework, make continuous
improvements aiming for higher levels of management and CSR,
and submit annual reports on the status and results of activities
in the format of a Communication on Progress (COP).

Nissha Sustainability Report 2022

Principle 5: the effective abolition of child labour; andPrinciple 6: the elimination of discrimination in respect of employment
and occupation.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ TCFD (Task Force on Climate-related Financial Dis-

closures)

In January 2022, we expressed agreement with the recommendations from the TCFD (Task Force on Climate-related Financial
Disclosures).
The TCFD is an organization established by the Financial Stability
Board (FSB). It strives for expansion in the disclosure of information by companies related to climate change.
In this Sustainability Report, we have implemented information
disclosure that employs the framework items recommended by
the TCFD. And in addition to aiming for the continued enhancement of governance and strategy concerning climate change
moving forward, we will also promote the expansion of information disclosure.

■ Japan Clean Ocean Material Alliance (CLOMA)

Environment
Principle 7: Businesses should support a precautionary approach toenvironmental challenges;
Principle 8: undertake initiatives to promote greater environmental
responsibility; andPrinciple 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

United Nations Global Compact

In January 2019, we joined the "Japan Clean Ocean Material
Alliance" (CLOMA), which aims to solve the marine plastic waste
problem. CLOMA is an organization established by the public
and private sectors to accelerate efforts across industries such as
proper management of plastic waste, promotion of the 3Rs, andpromotion of developing of alternative materials.

3-6-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

3-6-2 External evaluation■ CDP■ FTSE Blossom Japan Sector Relative Index■ SOMPO Sustainability Index

In December 2021, we received a "B" rating in the Climate Change Report 2021
published by the CDP, aninternational non-profit environmental organization. Thisis the third of the eight levels from the top, indicating we are at a
management level in addressing climate change.

We have been selected asa constituent stock of the
FTSE Blossom Japan Sector
Relative Index. This index
developed by FTSE Russell isdesigned to reflect the performance of companies inJapan demonstrating strong
Environmental, Social and Governance (ESG) practices in eachsector. The Government Pension Investment Fund (GPIF) is using
index as a benchmark for ESG investments.

We have been selected asa constituent stock of the
SOMPO Sustainability Index,
an index managed by Sompo
Asset Management Co., Ltd.
in succession since 2012.
This index is a unique active
index, which is composed ofapproximately 300 companies with outstanding ESG initiatives.

■ FTSE Blossom Japan Index■ S&P/JPX Carbon Efficient Index

We have been selected asa constituent stock of the
FTSE Blossom Japan Index.
The FTSE Blossom Japan
Index is an index developed
by FTSE Russell that reflects
the performance of Japanesecompanies with superior environmental, social and governance (ESG) performance. The index has become one of the leading indices for ESG investment,with the Government Pension Investment Fund (GPIF) using it as
their ESG index, for example.

We are included as a constituent stock of the S&P/
JPX Carbon Efficient Index.
The S&P/JPX Carbon EfficientIndex is built by the S&P
Dow Jones Index, one of theworld ʼ s largest independentindex companies, based oncarbon emissions data from Trucost, a pioneer in environmental assessment. This index increases the investment weight ofcompanies in the same industry with high carbon efficiency, andthose that disclose information on their greenhouse gas emissions.

Nissha Sustainability Report 2022

■ Certified Health and Productivity Management Out-standing Organizations
We have been certified as a
“White 500” companies in large
enterprise category of CertifiedHealth and Productivity Management Outstanding Organizations Recognition Program.
The Ministry of Economy, Tradeand Industry (METI) promotes
initiatives towards the strategic implementation of “health and productivity management” based on the idea that companies should consider
the health management of their employees and others from a management perspective. Also, recognizes particularly excellent companies
as Certified Health and Productivity Management Outstanding Organizations. The top 500 companies in the large enterprise category arecertified as "White 500".

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment■ Kurumin Certification
We h a v e r e c e i v e d “ Ku r u min ” certification for threeconsecutive terms since
the fiscal year ended March
2010, and also certified with
Platinum Kurumin in March
2019. Based on the Act on
Advancement of Measures to Support Raising Next-Generation
Children, “Platinum Kurumin” is a certification of companies thathave already obtained Kurumin certification in recognition of
their measures to support employees with children and are carrying out initiatives at an even higher level.

Human Rights

3-7

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Nissha Group Stakeholders

We identify the stakeholders as our customers, shareholders,
employees, suppliers, and society. Toward realizing our Mission,
we aim to realize our respective visions while valuing a relationship with the stakeholders in which we affect each other.

It was evaluated that our DX efforts and appropriate information
disclosure to stakeholders meet the standards required by METI.

Nissha Sustainability Report 2022

Third Party Verification / GRI
Standards Content Index / ESG Data

Communication• Sales activities in daily operations• Products and services information provided on the website• Providing information for sustainability survey• Providing information about conflict minerals• Supplier responsibility (SR) audits by customers■ Shareholder
We have in place an Investor Relations (IR) division and a Shareholder Relations (SR) division to serve as contact points for ourshareholders and investors, and to establish a system for promoting deeper communication with our shareholders and comprehensively providing financial and non-financial information. We
also create opportunities to meet directly and exchange dialogue
with our shareholders and investors through IR events and oneon-one briefings. Feedback and comments are reported regularly
at Board of Directors meetings and to the management, andused for the enhancement of our corporate value.

■ DX (Digital Transformation) Certification
In August 2021, we havecertified as a "DX-Certified
Operator" based on the DX(Digital Transformation) certification system establishedby the Ministry of Economy,
Trade and Industry (METI).

GovernanceNisshaʼs Circle of Trust■ Customer
Industrial Materials, Devices, and Medical Technologies̶we at
the Nissha Group operate three businesses on a global basis,using our core technologies to provide various products and services that satisfy market needs. While seeking to resolve social
issues through our businesses operations, we also promote fair
operating practices, efforts in labor and human rights, and thebuilding of environment-conscious production systems so that
our customers can feel safe about entrusting us with work.

Communication• Shareholders ʼ meetings and management briefings following
shareholdersʼ meetings• Financial results presentations for institutional investors• One-on-one briefings for institutional investors• Response to individual inquiries• IR information and sustainability information provided on the
Nissha website• Materials published for shareholders and investors (integrated
report, business report, sustainability report, etc.)• Providing information to investigation institutions for ESG in vestment

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Employee■ SocietyWe at the Nissha Group respect our employeesʼ human rights
and diversity from a global perspective. To this end, we promote
the creation of safe, comfortable workplace environments andoffer support for diverse work styles so that our employees canlive up to their full potential. We believe our employees are ourmost important management resources, and aim to achieve
growth for both the company and our employees.

The Nissha Group comprises a network that spans across theglobe, and in each region, we carry out business activities withrespect for the local culture and climate. While promoting communication with local communities to fulfill our basic responsibilities as a corporation and to be a company that is needed bysociety, we also strive to be aware of global social issues and playa role in resolving them.

Communication

Communication• Dialogue between labor and management• Education and training• Personnel evaluation and interviews• Hotline• Providing information via the company intranet and company
newsletter• Employee awareness survey and interviews• Support and promotion of arts and culture• Exchange events with community people• Factory and facility tours• Cleanup activities in factory areas• Future generation support activities• Employeesʼ participation in volunteer activities

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Supplier
We procure the raw materials, components, equipment, and services necessary for making our products from suppliers in various
regions. We work fairly and equally with all suppliers to promotesustainable procurement in order to share awareness of our social responsibility and enhance mutual corporate value.

Communication• Procurement activities in daily operations• CSR procurement briefings• CSR survey and audit• Self Assessment Questionnaire (SAQ)• In-house exhibitions and seminars themed around supplierproducts and technologies

Nissha Sustainability Report 2022

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Contents /Editorial Policy

3-8

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Along with Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

3-8-2 Initiatives in FY2021

3-8-1 Policy
Nissha Group will continue to contribute to the resolution of social issues through our businessactivities toward the realization of our Mission. Furthermore, we also clarify the main fields of our
support and engage in social contribution activities.

Social Contribution Policy
Nissha and Nissha People contribute widely to society to realize the enrichment of peopleʼs lives professedin our Mission by resolving social issues through our businesses and supporting the fields listed below.
Main fields of our support:

Fair Operating
Practices

Environment
Arts and Culture

The Nissha Group deploys business activities globally. As such, we promote action to respond to
global needs through communication with all of our stakeholders in each region. As a company with
its headquarters based in Kyoto, we engaged in the following kinds of actions in the fiscal year ended
December 2021. Moving forward, along with efforts to expand our support to future generations,
we are considering actions in the fields of the environment, medical treatment, and health as well.
Environment / support for future generation• Participated in the activities for companyʼs environmental workshops at elementary schoolsorganized by the Kyoto Chamber of Commerce and Industry's envoronmental measures special
committee
Carried out the workshop at Kyoto Municipal Utano Elementary School
Support for future generation• Participated in Childrenʼs Monodzukuri Project run by the Kyoto City Board of Education
Exhibited a corporate booth at the Kyoto Monodzukuri Hall of Fame, Kyoto City Inquiry Learning Centerfor Career Education
Provided materials for learning programs for elementary school students
Supported the "Making Supreme Moving Toys” Toy Contest Grand Prix in Kyoto• Collaborated with NPO Kids Meet Artists

Medical and wellness

Carried out the Machikusa Mikke workshop at Kyoto Municipal Suzaku Daishichi Elementary School
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Promotion and support of arts and culture• Sponsorship of arts and crafts exhibitions
Priest Gyōnen 700th Memorial Special Exhibition The Buddhist Legacy of Jianzhen (Ganjin) and His Successors (Kyoto National Museum)
ISHIMOTO Sho : A Centennial Retrospective (SHIMANE ART MUSEUM)

Established on March 6, 2009 / Revised on June 1, 2022

Celebrating the 160th Anniversary of Her Birth GRANDMA MOSES A Retrospective Exhibition (ABENO HARUKAS ART MUSEUM)
The 1400th Memorial for Prince Shōtoku HŌRYŪJI Prince Shōtoku and Treasures of Early Buddhist Faith inJapan (Nara National Museum)
KYOTOGRAPHIE international photography festival (The Museum of Kyoto and various locations in Kyoto)
Commemorating the 1200th Anniversary of Saichōʼs Death Buddhist Art of the Tendai School (Tokyo National Museum)
100 Years of Mingei : The Folk Crafts Movement (The National Museum of Modern Art, Tokyo)• Participation as a museum partner
Kyoto National Museum

Nissha Sustainability Report 2022

3-8-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

3-8-3 Membership in Community Organizations (Nissha)
Nissha participate in various activities in the region.
Organization / host

Position / membership status

Kyoto Chamber of Commerce and Industry

Permanent member

Company registered
NisshaKyoto Employersʼ Association

Councilor

NisshaKyoto Association of Corporate Executives

Special secretary

NisshaKyoto Industrial Association

Director

NisshaKyoto Institute of Technology

Joint management council member

NisshaKyoto University Graduate School of Business
Administration

Member of External Evaluation
Committee

NisshaRitsumeikan University Professional Graduate
School

Education Curriculum Council
MemberNisshaNISSHA FOUNDATION

Representative Director

NisshaSupport for Ukraine
In April 2022, Nissha Group launched a fundraising program to support
the people of Ukraine in collaboration with the European non-profit organization "SERMIG" and solicited donations from employees on a global scale. Nissha Co., Ltd. donated the same amount of donations fromNissha People all over the world as a matching gift through SERMIG.
In addition, Nissha Group in Japan produced stickers expressing support
for Ukraine and sold them in-house, and donated the entire amount of
the sales.

Sticker expressing support for Ukraine

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

4. Environmental Policy and Management Structures
4-1

Policy and Principles

4-2

Nissha Group has established an "Environmental Policy". And together with a "Environment Principles"that outlines specific conduct and regulations, we disseminate them within organizations and among
each individual employee. We have also issued the "Nissha Group Environmental Objectives". Each business location and organization sets their own goals in an effort to achieve those objectives, and acts inaccordance with those activity plans. These goals are linked with the Key Performance Indicators (KPI)
and action items for each business unit and are directly connected with our business activities.

Environment Policy

Management Structures

The Nissha Group deploys our environmental management system in all aspects of our businessactivities. Under the Risk Management and Compliance Committee, in domestic Nissha Group
companies Environmental Management Representative take the core role in creating environmental
management systems through the leadership of a senior director of Corporate General Affairs , andCorporate General Affairs of the Head Office serves as the central office for this endeavor. Furthermore, we also create, maintain, and constantly improve systems for compliance with environmental
laws and regulations and the RBA (Responsible Business Alliance), which serves as a global code of
conduct mainly for the electronics and automobile industries.

Nissha Group, as a member of the global society, aim for business development and the realization of aEnvironmental Management Structure

sustainable society through environmentally conscious corporate activities.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

The Environment Principles
1. We shall honor environmental laws, agreements with local communities, and demands from our customers.
2. We shall promote the reduction of greenhouse gas emissions through working to improve energy efficiency, etc. in order to deal with climate change risks.
3. We shall aim to construct a recycling society through our business activities, from product development
and production to sale, etc., reducing the environmental impact of our supply chain overall.
4. We shall construct a management system and promote continuous improvements to suit changes inthe business environment.
5. We shall value biodiversity and prevent pollution while co-existing with nature.
Daisuke Inoue
Director of the Board, Senior Executive Vice President, General Affairs
Nissha Co., Ltd.
Established on April 1, 2012 / Revised on May 1, 2022

Nissha Sustainability Report 2022

4-1

Contents /Editorial Policy

4-3

Nissha Group
Sustainability

Environment

Environmental Management
System (EMS)The Nissha Group operates its own environmental, health andsafety management system based on the ISO14001 environmental management system and the ISO45001 occupational healthand safety management system. This system includes compliancewith relevant laws and regulations as well as items requested bycustomers, and strives for continuous improvement.
Core business locations that have acquired ISO14001 certification implement environmental hazard evaluations (risk assessments). We evaluate the environmental risks that have been
identified, set priorities, and reflect the assessment in concrete
actions. In addition to setting KPIs and action items directly
related to business activity, we also strive for environmental performance improvement that interlocks with quality targets, etc.
Through these activities, we assess negative risks that impose an
undesirable impact on the environment and business and engage
in improvement, maintenance, and management aiming to reduce those risks.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

only major production bases, but also small production bases andsales bases with little impact on the environment. They are classified into ISO14001-certified bases and noncertified bases andset their priority management items as appropriate. The effectiveness of our EMS has ensured a high level of performance byengaging in confirmation, correction, and improvement throughinitiatives including once-a-year periodic internal auditing andsupport for responding to law and regulation revisions. The management review conducted at the end of the fiscal year includes
confirmation on the response to points stipulated by Directors(responsible for corporate general affairs) and Environment Management Representatives and the sharing of major environmental risks and action examples that may be useful as reference. As
such, it links to continued improvement.
In the fiscal year ended December 2021, we established a system to regularly and accurately collect information on the environmental impact of our key overseas bases, employed the information gathered from locations, and promoted actions designed
to reduce risk.

In our currently active 7th Medium-term Business Plan (FY2021.12– FY2023.12), we set medical devices, mobility, sustainable materials, etc. as the priority markets, and aim for growth via productlineups and services that contribute to resolving social issues. As
positive environment contributions, our development and producttechnology divisions set development themes at the product designand development stage from the societal issue resolution perspective of SDGs and lifecycles. Additionally, these efforts are set as one
environmental objective and reflected in concrete action.
Moreover, the EMS for the Nissha Group covers all our bases, not

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

5. Impact on the Environment out of Our Business Operations
In order to manage the impact on the environment out of our business operations, we grasp the input of major materials, the amount of waste, the amount of energy and water used, and the amountof exhaust and emissions.
The amount of major raw materials used at the Nissha Group in the fiscal year ended December
2021 was approximately 127,430t, an increase of approximately 11% from the previous fiscal
year. Of the total amount of major raw materials used, approximately 82% was used at our overseas
production bases. Of this amount, Nissha Metallizing Solutionsʼ metallized paper products accounted for approximately 84%. At domestic production bases, the amount used by the Industrial Materials business, the Devices business, and others increased. Starting in this fiscal year, we added input
data from the domestic Japanese Medical Technologies business.
The amount of energy used by the Nissha Group was 264,973MWh of electricity, an increase of
approximately 3% from the previous fiscal year, and 10,558,000m3 of gas, an increase of approximately 16% from the previous year. From the fiscal year ended December 2020, CO2 emissions arecalculated using the market-based method for bases in Japan and the location-based method foroverseas bases.
The overall Nissha Group waste material gross emissions were 30,587t, an approximate 2% increase from the previous fiscal year. The domestic Japanese Nissha Group company waste material
gross emissions were 17,465t, an approximate 6% reduction compared to the previous fiscal year.
The overseas Nissha Group company waste material gross emissions were 13,122t, an approximate
15% increase.

Nissha Sustainability Report 20225-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

INPUT

OUTPUT

Production bases in Japan
Industrial
Materials

Devices

PET/acryl film

Overseas production bases
1,165tResin/plastic
Film

Gravure ink

742t

Molds and molding

Resin

117t

materials

Others103t

Touch sensors

0t

Packing materials

161t

Paper

13,729tturing processes

Metal

Half-finished goods

57t

Chemical substances

55t

Resin materials

33t

PET film

3t

Alminum

4t

Packing materials

29t

Paper

4,424tInk

47t

Others37t

Total for production bases in Japan

22,981t*1. Posted as "Information and Communication" until Nissha

noble metals(items sold for

Metal waste

recycling)

Resin waste(items sold for Resin waste
120t

88,131trecycling)

Paper waste

Recyclable

Waste plastic

resources

Iron scrap, waste cans(industrial

Waste solvents, waste ink,

waste)

waste cloth
Sludge, others

2t

Product materials

Metal waste

2,218tResin materials

Technologies

Waste containing

resources

Waste acid, alkali

Aluminum

Medicalresources

Waste containing noble metals

1,073t2t1,589t1,491tRecyclable

Recyclable

Cardboards

Metallic materials

OthersOthers*1

4,506t843tMaterials used in

OthersOverseas production bases

Production bases in Japan

Solvents

product manufac-

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance74t
6,105t568t

Total for overseas production bases

104,449t

Total for Nissha Group

127,430t

Waste for

General business waste

simpleOthers (industrial waste)incineration/

5,743tPaper waste
Others
11,697t

Recyclable

Waste plastic

resources

Waste solvents,(industrial

waste ink, waste

waste)

cloth

25t

17,465t

Non-recyclable

Incineration/

waste

landfill

13,122t

Total for Nissha Group

30,587t

Including production bases in Japan and overseas

Including production bases in Japan and overseas

Water

1,948tTotal for overseas production bases

Emissions
Energy1,335tOtherslandfill
Total for production bases in Japan

9,838t125,244t

CO2
VOC

*2

826t
2,594,000m3

Electricity

264,973MWh

WastewaterGas

10,558,000m3*2. Detoxified by activated carbon adsorption, catalyst

Tap water
Underground waterIndustrial water

1,249,000m

3deodorization, etc.

46,000m3
1,670,000m3

Sustainability Report 2021

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

6. Responding to Climate Change (Addressing the TCFD Recommendations)
Nissha Group publicly endorsed the recommendations made by the Task Force on Climate-related
Financial Disclosures (TCFD) in January 2022.
The Task Force on Climate-related Financial Disclosures (TCFD) was established by the Financial
Stability Board (FSB) at the request of the G20 to examine climate-related disclosures and financial
institutionsʼ responses. The TCFDʼs final report, published in June 2017, recommends that companies take measures to understand and address climate change-related risks and opportunities as amanagement issue. The need for disclosure in line with the framework of the TCFD recommendations is clearly stated in the June 2021 revision of Japanʼs Corporate Governance Code, and analysisof the financial impact of risks and opportunities related to climate change on business is becoming
an essential part of ESG disclosure.
Using the framework of the TCFD recommendations, we have analyzed the financial impact of risks
and opportunities related to climate change on our business. The details of our analysis are outlined
below.

6-1

Governance

The Nissha Group views climate change issues from both a long-term perspective (backcasting from2030) and a short- to medium-term perspective, and manages them using the following system.

■ Management from a long-term perspective
The Nissha Group has defined Sustainability Vision (long-term vision) that shows where we want to
be by the year 2030. We aim to create social value by providing products and services that contribute to solving social issues and to achieve a 30% reduction in total CO2 emissions by 2030 (compared
to 2020) with a view of becoming carbon-neutral by 2050.
To accelerate this initiative, the Group has established a Sustainability Committee, chaired by the
President and CEO and vice-chaired by the Director of the Board, Executive Vice President in charge

Nissha Sustainability Report 2022

of Sustainability. The Sustainability Committee manages the material issues (materialities) resolvedby the Board of Directors. The Committee monitors progress by receiving quarterly reports on material issues from business organizations and divisions and the ESG Task Force, and reports annually to
the Board of Directors. The Board of Directors discusses the content of the report and makes observations as necessary.
In addition to reporting progress to the Sustainability Committee, the ESG Task Force, which handles
particularly important material issues, discusses the companyʼs response to climate change with the
President and CEO and the Director of the Board, Executive Vice President in charge of sustainability
on a quarterly basis.
Important strategic and financial decisions concerning our response to climate change are made by
the President and CEO within the scope of his authority.

■ Management from a short- to medium-term perspective
The Group has established a Risk Management and Compliance Committee, chaired by the Directorof the Board, Senior Executive Vice President in charge of legal affairs and vice-chaired by the SeniorVice President, Chief Supply Chain Officer, in order to centrally manage risks that may jeopardize
business operations from a short- to medium-term perspective. The Risk Management and Compliance Committee manages important risks that are identified, evaluated, and selected from a company-wide perspective. The Committee monitors progress on a quarterly basis based on reports fromthe subcommittees and divisions that manage such risks, and reports on its activities to the Board of
Directors once a year. The Board of Directors discusses the content of the reports and makes observations as necessary.
We have selected Continuity of Business Activities” as one of the significant climate change risks.
The Business Continuity Management Subcommittee, which manages such risks, formulates andupdates emergency preparedness based on the most recent potential natural disasters and responseplans for when a disaster occurs, and reports its activities to the Risk Management and Compliance
Committee. The President and CEO and the Senior Executive Vice President in charge of legal affairs
monitor the content of such reports and give instructions as necessary.

6-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Management structure

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

*1 NZE: a scenario in which the world decarbonizes and achieves virtually zero CO2 emissions in 2050. It is called the “1.5
cause the average temperature increase as of 2100, compared to pre-industrial times, will be between 1.3 and 1.5

scenario” be.

*2 STEPS: a scenario in which countries implement their stated current specific policies on decarbonization and no additional decarbonization-related policies are introduced. It is called the “3pre-industrial times, will be between 2.4 and 2.8

scenario” because the average temperature increase as of 2100, compared to.

Temperature rise in 2100 under each scenario

Source: created internally based on the IEA World Energy Outlook, 2021

6-2

Strategy

We have conducted a scenario analysis of the impact of future climate change on our business operations, based on the framework recommended by the TCFD.
This yearʼs analysis targets the Devices business, which accounts for about half of the Groupʼs net sales.
(1) Scenario analysis assumptions

We believe that we can visualize many climate change-related risks and opportunities by using the
1.5 ℃ scenario in which regulations are tightened and zero CO 2 emissions are achieved by 2050,
and the 3 ℃ scenario in which no additional policies are introduced and climate change measures do
not progress.
Under the two scenarios referenced from the IEA, the physical risks in 2030 are assumed to be thesame for both the 1.5 ℃ and 3 ℃ scenarios, since the temperature increase in 2030 is about 1.5 ℃
in both scenarios and there is no significant difference between the two. Therefore the size of the risk
between the two scenarios is not distinguished.

‒ Scenario analysis time horizon: consider transition and physical risks and opportunities as of2030‒ Scenario analysis target business: Devices business‒ Assumed scenario: referred to two scenarios from the International Energy Agency (IEA), the“Net Zero Emissions by 2050 (NZE)*1 scenario” (1.5°C scenario) and the “Stated Policies sce-nario (STEPS)*2” (3°C scenario)

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices(2) Scenario analysis process
Type

Policies and regulations(i) Consider significant climate-related risks and opportunities for the Devices business(ii) Consider and create scenarios(iii) Assess risks and opportunities based on the scenarios (Risks
and opportunities are assessed on the two axes of “likelihood of occurrence” and “degree of financial impact,” andthe results are described below as “magnitude of risk” and“magnitude of the opportunity.”)(iv) Consider countermeasures

Changes in the external
environment

Risks to Nissha

Risk magnitude
1.5℃
3℃

Countermeasures

Introduction or strengthening Cost of procuring energy and raw materials derived from fossil fuelsof carbon taxes
increase

Small

Large

- Reduce CO 2 emissions by conserve energy
through improved productivity and introductionof renewable energy- Investigate and study alternatives to raw materials
that contribute to reducing our environmental
impactElectricity costs increase due to the introduction of renewable energy

Small

Medium- Reduce electricity consumption through energy
conservation by productivity improvement

Small

Small

- Study trends in the logistics industry and consider
shifting to transportation methods that emit less
CO2

Establishment of carbon emission quotas
Cost of reducing CO2 emissions in logistics (procurement and shipping) increases

Tightening restrictions on the- Research technology trends to enable compliance
Restrictions on use of specified CFCs and their substitutes used atMedium Medium
use of specific substances andwith regulations
production bases increase capital investment costs
technologies
Small

Small

- Investigate alternative materials that can reduce
costs while maintaining the quality of packaging
materials

Transition to materials and- Develop low-carbon products with lower environtechnologies with lower envi- Net sales decrease due to replacement of our products for competitor
Medium Medium
ronmental impact
low-carbon products
mental impact

Increase in requests from
Net sales decline due to lost business opportunities caused by insuffiMedium
customers to reduce CO 2
cient responses to customer requests
emissions

Large

Reputation

Costs increase in order to replace product packaging materials

Markets

Growing importance of ESG ESG evaluation declines due to delays in addressing climate-related
evaluation in customersʼ sup- issues, etc. and we are not chosen as a supplier resulting in a decline
in net sales
plier selection

Medium - Enhance climate change initiatives

AcutePhysical risks

Nissha Sustainability Report 2022

Third Party Verification / GRI
Standards Content Index / ESG Data

Technologies

Transition risks(3) Results of risk analysis

Based on the above analysis, we have concluded that the following three climate change risks will have a large impact on ourbusiness.

Governance

Results of risk analysis

Scenario analysis was conducted using the following process:

Major risks related to climate change, our response to those risks,
and the magnitude of the risks in each scenario are analyzed in
the table on the right.

Quality Management / Efficiency
and Productivity Improvement- Promote the development of low-carbon techNet sales decline due to lost business opportunities resulting from
Medium Medium
nologiesdelays in development of low-carbon technologies

Intensifying weather disaster

Small

Suspension of factory operations caused by the flooding affects shipments resulting in a decrease in net sales

MediumCosts increase as a result of damage to own assets such as buildings,
equipment, and inventories due to flooding

Large

Suspension of supply of raw materials and parts due to disasters at
suppliers impact our factory operations and shipments, resulting in adecrease in our net sales

Medium- Conserve energy through improved productivity
and reduce CO2 emissions through the introduction of renewable energy- Improve and strengthen BCP- Establish a system to support affected sites- Improve and strengthen BCP- Rebuild supply chain

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights[Transition risks](i) Increase in energy use at production bases and raw material
procurement costs due to the introduction or strengtheningof carbon taxes (1.5°C scenario)

As measures to address (i) and (ii), we are reducing power consumption by streamlining production at our production bases
and improving the energy efficiency of our production and infrastructure facilities, and we are gradually switching to renewableenergy for electricity supplied by power companies. We will continue to promote reductions in emissions while verifying the costand effectiveness of such reductions.
As a countermeasure for (iii), the Group has established a Business Continuity Plan (BCP) to prepare for emergencies such as
natural disasters and pandemics, and to respond should such
emergencies occur. We regularly conduct BCP drills in which
management participates, to verify the effectiveness and prepare for disaster risks, including weather disasters, so that we areable to put the safety of human life first and foremost, minimize
damage, and promptly restart our businesses.
Based on our analysis using the above scenarios, our Devices
business has taken measures to address risks we believe will havea significant impact with respect to climate change and we believe that the business is resilient to climate change.

Type

Products
and services[Physical risks](iii) Costs increase as a result of damage to own assets such asbuildings, equipment, and inventories due to flooding (both
3°C scenario and 1.5°C scenario)

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Changes into
the external environment

Opportunity
magnitude

Opportunities to Nissha

3℃

Third Party Verification / GRI
Standards Content Index / ESG Data

Countermeasures

1.5℃

New markets and growing needs due
to climate change
Demand for Fuel Cell Vehicles (FCVs) expands
Arrival of a hydrogen-based society

Medium Medium- Develop and expand sales of products for the mobility
market (such as hydrogen detectors*1) that contribute to
reducing the environmental impact

Changes in the automobile market
Increase in Electric Vehicles (EV) sales

Small

Large

- Develop and expand sales of touch sensors for vehicles

Large

Large

- Develop and expand sales of gas sensor modules forrefrigerant detection

Growing demand for EVs equipped with touch sensors*2

Increase in sales opportunities for gas sensor modules for
Increased demand for products that
refrigerant detection*3 that contribute to reducing GHG
contribute to reducing GHG emissions
emissions*1 Hydrogen Detector
A device produced by Nissha FIS, a member of our group, to detect hydrogen gas leaks. In addition to the installation in fuel cell vehicles, demand is expected to grow in areas such as
household fuel cell systems and infrastructures such as hydrogen pipelines and hydrogen stations.
*2. Touch sensor for automobiles
Our touch sensors are used in industrial devices and automobiles as well as mobile phones and game consoles. Film-based material provides high visibility and a narrow frame while being
thin, light, unbreakable, and bendable. These features enable us to provide touch sensors for curved surfaces and large displays that meet next-generation automotive design demands.
*3. Gas sensor modules for refrigerant detection
A gas sensor produced by Nissha FIS. Refrigerants widely used in household air conditioning units today have low ozone depletion potential and global warming potential, but leak detection isnecessary as they are slightly flammable. We believe that our Groupʼs gas sensors can contribute to both safety and the prevention of global warming.

(4) Results of opportunity analysis
Based on our awareness that responding appropriately to theimpact of climate change will create business opportunities, wehave analyzed the magnitude of the opportunities in each scenario as shown in the table on the above.
Based on the above analysis, we have concluded that the following two items will have a large impact on our climate change
opportunities.
(i) Increase in net sales of automotive products due to expansionof EV market (1.5°C scenario)(ii) Increase in sales opportunities for gas sensor modules for

Nissha Sustainability Report 2022

Governance

Results of opportunity analysis

Market(ii) Loss of business opportunities caused by insufficient responses to customer requests to reduce CO2 emissions (1.5°
C scenario)

Human Resources

refrigerant detection due to the increase in demand for products that contribute to reductions in GHG emissions (both 3°
C scenario and 1.5°C scenario)
We have identified the expansion of our business targeting themobility market as one of the priority markets for achieving our
Sustainability Vision, and we are working to enhance productsthat contribute to reducing our environmental impact as a strategy to expand our business.
We intend to reflect the growing demand for products that contribute to reducing our environmental impact in our businessstrategy obtained from our scenario analysis results, such as EV
market expansion and reduction of GHG emissions.

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Contents /Editorial Policy

6-3

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

The Groupʼs Sustainability Committee and Risk Management and Compliance Committee each assess and manage risks related to climate change from a long-term perspective and a short- to medium-term perspective, through the following process.

■ Risk Management by the Sustainability Committee
To realize our Sustainability Vision (long-term vision), we have identified items of particular importance as materialities, which we are working on by setting specific strategy items, key performanceindicators, and action items backcasting from 2030 as a starting point.
Materialities are evaluated from the 4 perspectives of, Creating Business Opportunities, Risk Reduction, Strengthening Management Foundation, and Corporate Governance, using the two axesof “importance to society and stakeholders”, and “importance to Nissha”. The identified issues andtheir positioning within the Group are discussed by the Sustainability Committee, and materialities
are identified through deliberations and resolutions by the Board of Directors.
We have identified the following material issues relating to climate change from the perspectives ofrisk reduction and creating business opportunities.

Risk reduction

Creating business

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

The ESG Task Force is responsible for activities related to risk reduction. The ESG Task Force works
based on key performance indicators and action items approved by the Sustainability Committee
and reports the state of its activities to the Sustainability Committee on a quarterly basis.

Risk Management

Materiality

Fair Operating
Practices

Related SDGs

Activities related to creating business opportunities are handled by the business organization. The
business organization reports to the President and CEO at monthly meetings (business reviews), at
which the President and CEO confirms the progress of business strategies based on key performanceindicators and gives instructions on necessary action.
The Sustainability Committee discusses the formulation of the Medium-term Business Plan and the
Rolling Plan and reports its activities annually to the Board of Directors, and utilizes these in the formulation of these plans as necessary.
Refer to 3-4 Promotion Framework for Sustainability / 3-5 Materialities (Key Issues) and KPIs

■ Risk Management by the Risk Management and Compliance Committee
The Risk Management and Compliance Committee selects risks by carrying out risk assessments
over the entire Group and selecting from both a business activity perspective and a company-wide
perspective. From the business activity perspective, hearings are held with related departments andsubcommittees, and, after assessing them based on the frequency of these risks occurring and theseverity of their impact, an assessment is made that also takes into account control activities to suppress them happening. Then, assessing them from a company-wide perspective in order to work to
integrate the risks selected from a business activities perspective with management strategies, thesignificant risks are selected.

Responding to climate change

In principle, the Committee holds a general meeting once a year to select significant risks.

Contribute to the safety and comfort of transportation

The Committee has selected “business continuity plans” as a key climate change risk. The BusinessContinuity Management Subcommittee, which manages such risks, works to mitigate risks basedon key performance indicators and action items approved by the Risk Management and Compliance
Committee, and reports the state of its activities to the Risk Management and Compliance Committee.

and logistics, and the reduction of environmental impact

opportunities
Promotion of circular economy

Nissha Sustainability Report 2022

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6-4

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Indicators and Targets

Fair Operating
Practices6-5

We have defined total CO2 emissions as an indicator for assessing and managing risks related toclimate change. Our Sustainability Vision aims for a 30% reduction in CO2 emissions in 2030 (compared to 2020), with a view to achieving carbon neutrality by 2050.
In the next fiscal year and beyond, we will consider establishing and publishing indicators and targets
to assess and manage climate change-related business opportunities.

Nissha Group CO2 Emissions Volumes (Scope 1, 2)*1FY2019FY2020（Unit：t-CO2）

FY2021

Scope 1

26,603

20,85324,206

Scope 2

152,399

103,351

101,048

Scope 1 + 2

179,002124,204

125,244

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Finally

The Nissha Group views sustainability as an initiative toward the achievement of sustainable growthand development for both the company and society. To achieve sustainability, we consider social
issues to be business opportunities. It is important not only that we leverage our strengths to provide
products and services that help resolve social issues on an ongoing basis, but also that we strengthen
the management foundation underpinning our business activities, reduce risks that could hamper
business continuance, and promote governance to ensure these are all carried out appropriately.
Addressing climate change is positioned as one of the most important of the many social issues, andwe believe that contributing to resolving this issue through our business activities will provide enormous business opportunities for the Group. Meanwhile, although the transition and physical risks
associated with climate change are significant, we believe that their impact on our finances will belimited if sufficient measures are taken to address the risks we have identified through our analysis.
Our analysis based on the TCFD recommendations was conducted on the Devices business, whichcurrently accounts for half of the Groupʼs net sales. Going forward we will expand the scope of ouranalysis to include more businesses.

* We are currently in the process of calculating Scope 3 and we will continue to monitor and disclose major emissions.
*1. CO 2 emissions calculations up until the fiscal year ended December 2019 are calculated using a fixed emission coefficient. We haveadopted the GHG Protocol “Scope 2 Guidance” in the fiscal year ended December 2020 and we calculate emissions using market criteria
for domestic bases and location criteria for overseas bases.

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Fair Operating
Practices

Human Resources

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

7. CO Emissions and Reduction Efforts
2

The move around the world towards a decarbonized society in aneffort to reduce global warming gases is progressing in responseto the Paris Agreement. At the 26th Conference of the Parties(COP26) to the United Nations Framework Convention on Climate Change (UNFCCC) which was held in Glasgow, UK, from
October to November 2021, the parties agreed on a target tolimit the average global temperature rise to below 1.5 ℃ compared to pre-industrial levels (1.5 ℃ target). In response, companies are required to set medium- to long-term GHG emission
reduction targets consistent with the level required by the 1.5 ℃
target to work towards the 2050 net-zero target, and to disclose
information appropriately.

7-1

CO2 Emissions Reduction Target

Nissha Group regards addressing climate change as one of its mostimportant management issues. Our Sustainability Vision (long-term
vision) aims for a 30%* reduction in CO2 emissions in 2030 (compared to 2020) to achieve carbon neutrality by 2050.
As a specific activity to realize our Sustainability Vision, we haveestablished and are promoting a task force under the Sustainability
Committee on the theme of addressing climate change, which ischaired by the President. The task force is working to reduce our
Scope 1 and Scope 2 CO2 emissions by 3% per year, and to identify
Scope 3 categories and calculate CO2 emissions in our supply chain.

7-2

Summary of Emission

Energytype

7-3

Reference year
(FY2020)

Results of FY2021

CO2 emission（t-CO2）CO2 emission year-to-year（t-CO2）comparison

Scope 1 Mains gas

20,85324,196

0.16

Scope 2 Electricity

103,351

101,048

-0.02

Total

124,204

125,244

0.8

The Group ʼ s CO 2 emissions are characterized by the ratio of
Scope 2 emissions being significantly higher than the ratio of
Scope 1 emissions.
In the fiscal year ended December 2021, CO 2 emissions remained almost flat compared to the fiscal year ended December
2020. Furthermore, in the fiscal year ended December 2021,
the Scope 1 ratio increased by 2.5%. This was due to increased
consumption at the Nitec Industries, Inc. (NII) Koka Factory andNissha Metallizing Solutions, which use mains gas.
Refer to 27. Third Party Verification

Trends in CO2 Emissions andEnergy Consumption, etc.

The Nissha Groupʼs CO2 emissions and energy consumption are
shown below. The totals obtained by multiplying the individual
consumption of fuels such as electricity, gas, gasoline, diesel, andheavy oil with the specified factors are Nisshaʼs energy consumption levels. The figures obtained by multiplying energy consumption by the CO 2 emission factors are the CO 2 emissions of theGroup.
Nissha Group emits almost no energy-related greenhouse gases
other than CO2, and its impact is minimal.
About the following tables
1. CO2 emission factors for electricity are calculated based on data calculated using
the market-based method for Japan and the location-based method for overseas.
2. The company names listed in the tables are as follows.
Nissha and others: Nissha Co., Ltd. and affiliated companies
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
NCI (NPC): Nissha Printing Communications, Inc. (In January 2019, NCI mergedwith NPC (Nitec Printing Co., Ltd.) and they are shown together here.)

The Group will promote these initiatives on a global basis, while
monitoring global trends relating to the reduction of CO2 emissions,with an eye to introducing even more ambitious targets.
*Upwardly revised in July 2021 from the previous 20% reduction (compared to 2020)

Nissha Sustainability Report 2022

7-1

Contents /Editorial Policy

Nissha Group
Sustainability

Human Rights

Environment■ CO2 Emissions Volumes and Basic Unit

Fair Operating
Practices

Human Resources

Quality Management / Efficiency
and Productivity Improvement■ Electricity Consumption■ Gasoline, Diesel, and Heavy Oil Consumption(unit: t-CO2, excluding basic unit)

Company

FY2019FY2020Third Party Verification / GRI
Standards Content Index / ESG Data

Governance(unit: MWh)

FY2021Company

FY2019FY2020(unit: kl)

FY2021Company

FY2019FY2020

FY2021

Nissha and others

4,662

3,721

3,925

Nissha and others

9,561

9,002

9,090

Nissha and others

77

54

48

NII

13,95911,507

13,253

NII

18,214

17,633

19,300

NII

7

6

8

NPT

87,177

69,57265,604

NPT

166,887

154,259

151,635

NPT

13

12

11

990

770

870

2,368

2,306

2,463

NCI (NPC)00240,47838,634

41,592

77,56374,264

82,485

150

133

151

147,266

124,204

125,244274,593

257,464

264,973

246

205

220

0.85

0.69

0.66

NCI (NPC)
Overseas
production bases
Total
Basic Unit*

NCI (NPC)
Overseas
production bases
Total

Overseas
production bases
Total■ Gas Consumption*CO2 emissions / Net sales (Millions of JPY)

(unit: 1,000m3)

Company■ Energy Consumption and Basic Unit
Company

FY2019(unit: 1,000GJ, excluding basic unit)

Nissha and others

FY2020

FY2021

244

NII

2,833

2,506

2,891

2,317

1,441

1,729

0

0

0

6,226

4,919

5,694

11,585

9,085

10,558

102

104

NPT

NII

309

271

322

NCI (NPC)

NPT

1,768

1,603

1,590

Overseas

24

23

25

1,058

967

1,084

Total

3,266

2,966

3,124

Basic Unit*

0.01890.01650.0165production bases

FY2021

220

108

Overseas

FY2020208

Nissha and others

NCI (NPC)FY2019production bases
Total*Energy consumption (1,000GJ) / Net sales (Millions of JPY)

Nissha Sustainability Report 2022

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Contents /Editorial Policy

7-4

Nissha Group
Sustainability

Environment

Emissions Reduction Efforts

As a measure to reduce CO 2 emissions from electricity use, theNissha Group in Japan has switched all of the electricity used at
the NII Koka Factory, a production base for the Industrial Materials business, to renewable energy sources in January 2022, andwill switch part of the electricity used at the NPT Kaga Factory,
a production base for the Devices business, to renewable energy
sources in September 2022.
At overseas bases, since 2018, Nissha (Kunshan) Precision IMD
Mold Co., Ltd. (China), an Industrial Materials business unit production base, has continued to generate solar power, and Nissha
Metallizing Solutions (Europe) is planning to install a system toreplace part of its electricity with solar and wind power at its production bases.
Other energy-saving measures include switching to LED lighting
and upgrading aging facilities with energy-efficient equipment tocontain electricity consumption.

7-5

Basic Unit Management of Energy
Consumed in Production

In addition to monitoring and managing energy consumption per
corporate unit as required by the Act on the Rational Use of Energy, the Groupʼs domestic production bases have been conducting basic unit management of energy consumed in production
since the fiscal year ended March 2014, aiming to improve theefficiency of energy use.

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

The actual basic unit for each production base in the fiscal year
ended December 2020 was set at 1.00, and the target for 2021
was set at 0.99 or less, based on this. The results were as follows.
We promoted efforts to improve production efficiency and energy conservation, and we achieved 0.99 or less compared to theprevious fiscal year.
Basic unit
(based on production volume etc.)

Company

FY2021
evaluation

FY2020results

FY2021targetFY2021
results

1.00

0.99 or
less

1.09

×

1.00

0.99 or
less

1.00

×

NPT Himeji
Factory

1.00

0.99 or
less

1.28

×

NPT Kaga
Factory

1.00

0.99 or
less

0.99

〇

NCI (NPC)

1.00

0.99 or
less

0.95

〇

Nissha(Headquarters)
NII Koka
Factory

7-6

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Investigation object

CO2 emissions in
FY2021 (t-CO2)

Employee (excluding some non-regular employees)
commuting

2,204

Business travel

281

Transport and shipping (downstream)*2 in Japan

17,766

Purchased products and services

18,603

We will continue to work on the disclosure of Scope 3.
Refer to 27. Third Party Verification*1. Scope: Scope of greenhouse gas (GHG) calculation. The following three are shown.
Scope 1: Direct GHG emissions from sources owned or controlled by the company.
Scope 2: Indirect GHG emissions through consumption of electricity, steam, or heat.
Scope 3: Indirect emissions other than those in Scope 2.
*2. Distribution of products sold by Nissha to the point of delivery to the customer.

Initiative in Scope*1 3Management

Companies are increasingly disclosing their own Scope 3 and promoting efforts to reduce greenhouse gases over the entire value
chain. At Nissha, the ESG Task Force (on climate change), under
the umbrella of the ESG Task Force established by the Sustainability Committee, is taking the lead in identifying categories and calculating CO2 emissions in the supply chain with respect to Scope 3.

7-4

Contents /Editorial Policy

7-7

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Coverage and Calculation Method of CO2 Emission
Calculation

Fair Operating
Practices

Coverage• Nitec Industries, Inc.

• Nissha Schuster Kunststofftechnik• Nitec Precision and Technologies, Inc.

• Nissha Back Stickers• Nissha Printing Communications, Inc.

• Nissha Back Stickers International• Nissha FIS, Inc.

• Nissha Metallizing Solutions N.V.

• Nissha Business Service, Inc.

• Nissha Metallizing Solutions S.r.l.

• Zonnebodo Pharmaceutical Co., Ltd.

• Nissha Metallizing Solutions Ltd.

• Nissha Eimo Technologies• Nissha Metallizing Solutions Produtos Metal-• Nissha PMX Technologies, S.A. de C.V.

izados Ltda

Third Party Verification / GRI
Standards Content Index / ESG Data

CO2 emissions associated with employee commuting and business trips

Coverage• Tyrolmed GmbH

Governance■ Scope 3■ Scope 1, 2
• Nissha Co., Ltd.

Quality Management / Efficiency
and Productivity Improvement• Nissha Co., Ltd.

• Nissha F8, Inc.

• Nitec Industries, Inc.

• M crossing Co., Ltd.

• Nitec Precision and Technologies, Inc.

• Nissha FIS, Inc.

• Nissha Printing Communications, Inc.

• Nissha Business Service, Inc.
• Zonnebodo Pharmaceutical Co., Ltd.

Calculated based on;
Calculation
methodMinistry of the Environment/Ministry of Economy, Trade and Industry “Basic Guidelines for
Calculating Greenhouse Gas Emissions Through the Supply Chain（Ver.2.3)”
Ministry of the Environment "Calculation intensity database for calculating greenhouse gas
emissions of organizations through the supply chain（Ver.3.0)”

CO2 emissions from logistics suppliers• Nissha Medical Technologies• Nissha Metallizing Solutions GmbH• Lead-Lok, Inc.

• Nissha (Kunshan) Precision IMD Mold Co., Ltd.

Coverage

Logistics suppliers（32 companies）• CEA Global Dominicana, S.R.L.

• Guangzhou Nissha High Precision Plastics Co.,

Calculation

Domestic transportation: based on the Fuel Economy Law

methodOverseas transportation: sum up CO2 emissions from conventional Ton-kilometer method• CEA Medical Manufacturing, Inc.
• Nissha Medical Technologies Ltd.
• Nissha Medical Technologies SAS

Ltd.
• Nissha Precision Technologies Malaysia Sdn.
Bhd.

Calculated based on Ministry of the Environment "Greenhouse Gas Emissions Calculation
Report Manual (Ver.4.7)” (CO2 emission factors)
Calculation

CO2 emissions associated with the fuel use: Emission factor based on the Act on Promotion

methodof Global Warming Countermeasures
CO2 emissions associated with power purchase: Emission factor based on the market-based
method for domestic bases and the location-based method for overseas bases

Nissha Sustainability Report 2022

CO2 emissions from major domestic material suppliers
Coverage
Calculation
methodMajor domestic material suppliers (9 companies)
Fuel consumption x sales ratio, sum up CO2 emissions per product*Calculations of CO2 emissions are subject to inherent uncertainty due to, for example, incomplete scientific knowledge used to determine
emission factors and numerical data.

7-7

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

8. Waste Management
8-1

Total Amount of Waste
Generated by Nissha GroupIn the fiscal year ended December 2021, the Nissha Groupgenerated a total of 30,587t of waste, including waste sold forrecycling, waste reused as resources, and waste for simple incineration/landfill. Of this, waste generated by production bases inJapan accounted for 17,465t, a reduction of approximately 6%
from the 18,538t generated in the fiscal year ended December
2020. Emissions from incineration and landfill waste accounted
for 25t, a reduction of approximately 7% from the 27t generated in the fiscal year ended December 2020. The source of these
reductions is a decrease in waste material output by Nitec Precision and Technologies, Inc. (NPT), a production base for the Devices business, a business arena which makes up approximately
86% of the waste material gross emissions within Japan.

■ Total amount of waste generated and recycling

Our recycling and resource reuse rate for the Nissha Group in
Japan in the fiscal year ended December 2021 was the same
99.9% as last year, allowing us to meet our target of zero emissions (a recycling and resource reuse rates of 99.5% or above).

■ Total amount of waste generated and recycling

and resource reuse rate (Nissha Group overseas)
Nissha Group overseas waste material gross emissions were13,122t for the fiscal year ended December 2021, an approximate 15% increase from the performance of 11,397t for fiscal
year ended December 2020. This is due to an increase in wastematerial output caused by Decoration (Mobility) and Sustainable
Materials (Metalized paper) that drove the increase in net sales
for the Industrial Materials business.
The recycling and resource recovery rate for major overseas Nissha Group bases was 85.2%. We will continue to monitor theamount of waste generated by our overseas production bases.

and resource reuse rate (Nissha Group in Japan)

8-2

Risk Management Related toWaste and Waste Converted in
Valuable Resources

At Nissha Group in Japan, we recognize that waste and waste converted into valuable resources have the following three main risks.
• Accidents and disasters caused by waste and waste converted into
valuable resources (including at treatment contractors)• Environmental pollution and violation of laws caused by inappro-

Nissha Sustainability Report 2022

priate waste treatment• Leakage of confidential information from waste and waste converted into valuable resources
To alleviate these risks, we are working on safety management ofwaste in accordance with the Nissha Group Waste Management
Regulations. In line with these regulations, each base has drawn
up its own Waste Management Manual and makes efforts towardthorough waste separation and management. At the Nissha Groupin Japan, from the perspective of preventing accidents and disasters,
whether a small amount of substance or a spray can, the propertiesof waste are checked meticulously and monitored so as to prevent
spillage during transportation and accidents at treatment facilities.
Furthermore, at the Kyoto Global Headquarters, research and development by the business development division advanced, and changes
are being seen in the content of waste material being discharged. To
handle risks that come with these kinds of changes, we have been ineven closer communications with industrial waste material processing contractors to ensure safe waster material processing.
The Nissha Group Waste Management Regulations, which serve as
rules to prevent waste material related accidents and environmental
contamination, employ standards for selecting outside contractors
to process waste material. The regulations also proscribe and implement standards for periodic processing site inspections that makeuse of checklists. In addition, we have in place standards for managing waste and waste converted into valuable resources that containconfidential information, and promote management in association
with our information security management system (ISMS).

8

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

9. Management of Chemical Substances and Environmental Risks
9-1

Establishment and Operation of the
Nissha Control Criteria for Chemical
Substances in Purchased Products

Many of the parts and materials used in Nissha Group products
are requested or specified by customers, and so the materials
and the suppliers differ for each product.
Management of the chemical substances used in our products
and their production processes is governed by the Nissha Control
Criteria for Chemical Substances in Purchased Products, whichreflect the laws and regulations of relevant countries or regions
and the standards of each of our customers, to serve as a set ofvoluntary standards.
*9-1 and 9-2 describe the state of management of chemical substances used in products
manufactured by our Industrial Materials business (excluding Metallized paper) and Devices
business mainly in Japan which are then shipped overseas, including to Europe.

9-2

Management of Chemical
Substances Used in Products

9-2-1 Operation of the Nissha Control Criteria for
Chemical Substances in Purchased Products
We use our Nissha Control Criteria for Chemical Substances in Purchased Products as our standards for purchased goods such as raw
materials and sub-materials used for the products of our group.
These standards reflect the laws and regulations of relevant countries and regions, including the RoHS Directive and the REACH Reg-

Nissha Sustainability Report 2022

ulation, as well as the substance-related criteria of our customers.
Whenever the relevant laws or regulations are amended, or our customersʼ criteria change, we identify the differences from our criteria
in order to adapt to these changes.

Content of the Nissha Control Criteria for Chemical Substances in
Purchased Products and List of Target Substances (partial excerpt)

The Nissha Control Criteria for Chemical Substances in Purchased
Products are revised on an annual basis, taking these differences
into account. If there is a major revision, we organize briefing sessions for related divisions and our suppliers to inform them of thechanges. When selecting new materials or changing materials inthe design and development stages, we conduct design reviews (DR)and assess compliance with the Nissha Control Criteria for Chemical
Substances in Purchased Products while considering the impact onhuman health and the environment. When used in our factories, weselect raw materials that have passed the DR and which meet thecriteria, ensuring traceability for each process.

• Asbestos fibres• Dioxins• Ozone depleting substances• Fluorinated greenhouse gases
Usage-prohibited • Bisphenol-A (with usage conditions)• Substances prohibited from being manufactured (Manufacsubstance*1
ture-prohibited substance)• Specific amine (with regulations on impurity content)• Azo-dyes which do not form specific amine (with regulations on impurity content concentration)• Arsenic and its compounds (with usage conditions)

We are also building a mechanism for identifying and separating
noncompliant substances to prevent misuse or contamination, andfor responding swiftly including reporting to customers.

Deliberate
usage-prohibited
substance*2

To promote management of the chemical substances used in our
products, the environmental and safety management division athead office functions as the secretariat and works with the productdesign and development, quality assurance, and procurement andsourcing divisions at each business unit to inspect the state of management of chemical substances, including differences between
laws, regulations and rules, and customer requirements. This system ensures strict control of chemical substances, from the design
stage to the final product, responding to changes in the needs ofsociety and the demands of our customers.

• Substances subject to RoHS directive• REACH SVHC (Substances of Very High Concern)• Nickel and its compounds (with usage conditions)• Polychlorinated biphenyls (PCBs)• Specific phthalates• Specific benzotriazol• Dimethylfumarate (DMF)• Perfluorooctane sulfonates (PFOS)• Perfluorooctanoate (PFOA)• Natural rubber• Class 1 Specific Chemical Substances of Law Concerning
the Examination and Regulation of Manufacture, etc. of
Chemical Substances• TSCA preferred substances• POPs Convention residual organic pollutants

Regulated
substance*3• Global Automotive Declarable Substance List
• Conflict minerals• The Proposition 65• Children's Safe Product Act (RCW 70.240.030) The Reporting List of Chemicals of High Concern to Children (CHCC)

In the fiscal year ended December 2021, there were no cases inwhich chemical substances used in our products were recalled fromthe market or reshipped with changing in materials.

Contests ofstandards

List of target substances*The above list shows examples of regulated substances that apply to purchased products(Nissha product raw materials, chemicals used in the production process for materials, etc.)*1. Use, either deliberately or not deliberately, is prohibited. Inclusion of impurities is also
prohibited.
*2. Deliberate use is prohibited. There are regulations on the inclusion of impurities.
*3. Substance which requires a content report from suppliers to Nissha.

9-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

9-2-2 Compliance with the RoHS Directive■ Efforts to comply with the RoHS Directive
Nissha complies with environmental regulations in Europe mainly through the Nissha Control Criteria for Chemical Substances in
Purchased Products, our voluntary regulations on chemical substances. Our products comply with the RoHS Directive *, which
regulates the use of certain substances in electrical and electronic equipment.
* This refers to the European “Directive on the Restriction of the Use of Certain Hazardous
Substances in Electrical and Electronic Equipment (2011/65/EU)” and its amendments.
The Directive prohibits the inclusion in products of lead, mercury, cadmium, hexavalentchromium, PBB, PBDE, bis(2-ethylhexyl) phthalate, butyl benzyl phthalate, dibutyl phthalate, and diisobutyl phthalate in excess of the maximum permissible amount, except for
exempted applications.

Original Text of the Directive■ System for promoting compliance with the RoHS

Directive
Nissha has been working on either not using or using fewer hazardous chemical substances used in our products since the firstedition of the Nissha Control Criteria for Environmentally Controlled Substances was established in 2007, leading up to thecurrent Nissha Control Criteria for Chemical Substances in Purchased Products.
Substances regulated by the RoHS Directive (formerly Directive
2002/95/EC) have been subject to control as environmentallycontrolled substances since the first edition by complying withcustomer requests in accordance with the directive.

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement• Conformity with the previous directive (2002/95/EC)
There is no intentional use of mercury, cadmium, specific bromine flame retardants, or hexavalent chromium in our products. Although we used to use lead in solder for quality reasons
and with the approval of our customers, we have been working
towards total abolition with the establishment of the Nissha
Control Criteria for Environmentally Controlled Substances, andcurrently prohibit the use of lead in new products.
• Conformity with the new directive (2011/65/EU)
Although Annex III (exemption list) was amended by European Commission Decision 2010/571/EU (effective January2013), none of the relevant chemical substances were usedin our products.
• Addition of specific phthalate esters to restricted substances
The European Commission Delegated Directive (EU)2015/863 (effective July 2019) amended Annex II (List of
Restricted Substances), designating specific phthalate esters*
as a new restricted substance. As a result, the marketing ofelectrical and electronic equipment (EEE) containing specified
phthalate esters in the European Economic Area (EEA) has
been banned. To date, we have not used any of the relevant
chemical substances in our products.
*Bis (2-ethylhexyl) phthalate [DEHP], Benzyl butyl phthalate [BBP], Dibutyl phthalate [DBP],
Diisobutyl phthalate [DIBP]■ Warranty system for RoHS specifications

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

• Example of a warranty system based on cooperation with material suppliers‒ Management system for RoHS Directive based on cooperation with material suppliers‒ Annual submission of certificates of conformity, reportson the inclusion of prohibited substances, reports on the
inclusion of chemical substances in products, content
information, ICP data, and written pledges from suppliersof materials for mass production• Example of countermeasures in the production process‒ Enforcement of rules when accepting materials‒ Distinguishing between storage locations and labeling of
input materials‒ Ensuring and maintaining traceability‒ Identifying and separating noncompliant substances• Example of information provided to customers in connection
with sales‒ Provision of information on chemical substances used in
products‒ Registration in International Material Data System (IMDS)
and the customerʼs management system, and issuance of
SDS
Our main products do not use any chemical substances that fallunder the RoHS Directive or other directives, so we do not currently have a plan to reduce them.

The points required for RoHS compliance are listed below. We are
putting measures into place at each stage of the process, building a comprehensive countermeasures system.

9-2-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

9-2-3 Compliance with REACH Regulation

9-2-4 Response to California Proposition 65

processes in accordance with the Nissha Control Criteria for
Chemical Substances in Purchased Products.

The REACH Regulation (EC 1907/2006) are a European law
on the registration, evaluation, authorization and restriction ofchemical substances. REACH came into force in 2007 with theaim of protecting human health and the environment.

Proposition 65, known as the Safe Drinking Water and Toxic
Enforcement Act of 1986, is a California law enacted by referendum in November 1986 to protect the stateʼs citizens and drinking water resources from chemicals that can cause cancer andbirth defects.

These include the substances prohibited for manufacturing under the Enforcement Order of the Industrial Safety and Health
Law and the substances regulated by the Poisonous and Deleterious Substances Control Act, and the Act on Confirmation, etc.
of Release Amounts of Specific Chemical Substances in the Environment and Promotion of Improvements to the Management
Thereof (PRTR Act).

We have a system in place to comply with the REACH Regulation
through the management of chemical substances used in our
products.
Many of the products listed on our website fall under the category of “ articles ” as defined by the REACH Regulation. The
REACH Regulation requires the communication of information
within Europe when “articles” contain a Substance of Very High
Concern (SVHC) as specified by the supervisory authority (European Chemicals Agency: ECHA). The Nissha Control Criteria for
Chemical Substances in Purchased Products defines SVHCs as
substances prohibited for intentional use, and based on information and data obtained from our material suppliers as well as ourown knowledge, we have confirmed that we do not currently use
SVHCs in our core products (molded products). This is also statedin the SDS and other documents that we provide in response tocustomer requests.
Reference Materials:- Latest SVHC list from the ECHA

The stateʼs Environmental Protection Agency Office of Environmental Health Hazard Assessment (OEHHA) requires employers
to display a warning statement for products containing chemicals
specified in Proposition 65. Also, a product is required to display
a warning statement designated by the state if it is sold or distributed in the state, even if it is not produced there.
Our voluntary standards, Nissha Control Criteria for Chemical
Substances in Purchased Products, also include information on
California Proposition 65. We are working to comply with this law
by, for example, having our material suppliers submit a certificate
of compliance on a regular basis every year. Note that this applies
to none of the Companyʼs products.

9-3

Chemical Substances Used in
Production Processes- Supervisory Authority: European Chemicals Agency (ECHA)- Text of the REACH Regulation

9-3-1 Operation of the Nissha Control Criteria
for Chemical Substances in Purchased
Products

9-3-2 Reduction of Chemical Substances in Use
Our Environmental Objectives include reducing the usage rate ofchemical substances at ISO14001-certified business sites. In thefiscal year ended December 2021, the Nitec Industries, Inc. (NII)
Koka Factory achieved its target of a 1% reduction year-overyear of PRTR substances and organic solvents other than PRTR
substances.
Nitec Precision and Technologies, Inc. (NPT) achieved results in
its efforts to reduce the use of chemicals by improving yield rates
and through efforts to reduce the use of chemicals in wastewater
treatment and facility infrastructure.
Fiscal year

FY2019FY2020

FY2021

Assessment

○

○

○

In addition to the chemical substances used in our products, we
also regulate the chemical substances used in our production

Nissha Sustainability Report 2022

9-2-3

Contents /Editorial Policy

9-4

Nissha Group
Sustainability

Environment

Management of Environmental
Pollutants

The Nissha Group in Japan constructed a system to understand and manage how environmental pollutants are used ateach business site. We use this system even for the calculationof emission and transfer amounts which the Act on Confirmation, etc. of Release Amounts of Specific Chemical Substancesin the Environment and Promotion of Improvements to theManagement Thereof (PRTR Act) requires reporting on.
In the fiscal year ended December 2021, substances whichwere transferred or emitted in excess of one tonne were ethylbenzene, xylene, toluene, water-soluble copper salts (excluding complex salts).
We also take great care with management when handlingchemical substances, such as establishing our own voluntarystandards. In addition to displaying GHS * labels on containers
to warn people, we carry out measures to prevent environmental pollution such as installing spillover containers to ensure safety if the main container develops a leak, and ensurethat all related personnel are familiar with these measures.
Through an internal audit, we check the status of chemical
substance management.
*GHS (Globally Harmonized System of Classification and Labelling of Chemicals): Provides
internationally-standardized rules to harmonize the contents of safety data sheets andstandards of classification per hazard for chemical products.

Nissha Sustainability Report 2022

Human Rights

9-5

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Response to Environmental Risks(preventing environmental accidents or pollution)

The Nissha Group in Japan realizes that pollution from chemical
substances is a serious environmental risk, and works to manage
it. To prevent environmental accidents from happening duringstorage or transportation of chemical substances within a work
site, we lay out management procedures that consider the scale
and frequency of accidents. In addition, we have set emergency
response procedures and carry out training on an ongoing basis
to minimize the influences in event of a leak, and revise and improve our methods as required.
• Examples of initiatives for preventing pollution
Equipment of emergency cutoff devices
Sites for deliveries of liquid chemicals via tanker truck or waste
liquid collection are equipped with emergency cutoff devices
to prevent any substances from leaking outside the site if an
accident occurs.
• Leak response training
We have established response procedures to prevent pollution
from spreading in the event of a leak at a site for receiving
chemicals, unloading chemicals, or collecting waste liquid.
We also carry out regular training, and review the response
procedures as necessary.
In FY2021, there was one chemical leak accident at the NII Koka
Factory, but it did not have a significant environmental impact.
Other than that, there were no serious environmental accidents
or violations of environmental regulations, and there were no
penalties or fines.

9-4

Contents /Editorial Policy

9-6

Nissha Group
Sustainability

Environment

Prevention of Water Pollution

We have set our own strict standards and regularly conduct voluntary surveys of waste water quality to prevent water pollution.
The figures for core production bases are as follows.
*1. Water Pollution Control Act*2. Law Concerning Special Measures for Conservation of the Environment of the Seto
Inland Sea

Human Rights

Fair Operating
Practices

Human Resources

Quality Management / Efficiency
and Productivity Improvement

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance■ Nitec Precision and Technologies, Inc. (NPT) Himeji Factory Measurements of Wastewater Quality

Items measured

Agreement
value*2

Regulatory
value*1

Discharged water

5,200

5,000

Voluntarystandard
5,000

FY2019Unit

Analysis
value

3

m

FY2020Analysisvalue

Evaluation

FY2021

Evaluation

Analysisvalue

Evaluation

4,655

○

4,156

〇

4,150

〇

5.8

5.8

6.5

6.9

○

6.8

〇

6.9

〇

〜 8.6

〜 8.6

〜8

7.6

○

7.5

〇

7.5

〇

BOD

120

10

9

mg/l

2.8

○

4.0

〇

3.7

〇

COD

120

10

9

mg/l

7.3

○

5.2

〇

4.4

〇

150

5

4.5

mg/l

1.6

○

1.9

〇

2.6

〇

1

0.9

mg/l

<0.5

○

<0.5

〇

<0.5

〇

pH

SS
n-hexane derived
substances

Mineral oil 5
Vegetable oil 30

Phenol

5

0.1

0.08

mg/l

<0.005○<0.005〇<0.005〇

Copper

3

0.5

0.4

mg/l

0.04

○

0.05

〇

0.02

〇

Zinc

2

1.5

1.2

mg/l

<0.01

○

<0.01

〇

<0.01

〇

Soluble iron

10

0.15

0.08

mg/l

0.02

○

0.03

〇

0.03

〇

Soluble manganese

10

0.05

0.045

mg/l

0.04

○

0.04

〇

0.04

〇

Chromium

2

0.02

0.02

mg/l

<0.02

○

<0.02

〇

<0.02

〇

Nitrogen

60

10

9

mg/l

5.7

○

4.2

〇

4.5

〇

Phosphorus

8

1

0.45

mg/l

0.11

○

0.02

〇

0.03

〇

■ Nitec Precision and Technologies, Inc. (NPT) Kaga Factory Measurements of Wastewater Quality
Items
measuredpH

Voluntarystandard

5.8 〜 8.6

6.2 〜 8.2

FY2019
Unit

Final effluent(Average)

FY2020

Final effluent(Maximum)

Final effluent(Average)

FY2021

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)

7.5

〇

7.5

〇

7.5

〇

7.7

〇

7.4

〇

7.7

〇

35.0

〇

BOD

160 or less40 or less

mg/l

21.9

〇

34.0

〇

23.4

〇

40.0

〇

23.3

〇

COD

160 or less80 or less

mg/l

34.0

〇

47.0

〇

33.5

〇

47.0

〇

37.7

〇

44.0

〇

SS

200 or less20 or less

mg/l

9.1

〇

18.0

〇

6.3

〇

23.0

〇

6.0

〇

10.0

〇

30

15 or less

mg/l

0.6

〇

0.8

〇

0.6

〇

0.9

〇

0.5

〇

0.5

〇

n-hexane derived
substances

Nissha Sustainability Report 2022

Regulatory
value(Prefecture)

9-6

Contents /Editorial Policy

9-7

Nissha Group
Sustainability

Environment

List of PRTR-designatedChemical Substances

In FY2021, the number of substances subject to PRTR Law notification was eight at three factories.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Nitec Industries, Inc. (NII) Koka Factory

Unit: kg

FY2019PRTR
No.

Name ofchemical substance5380

Ethylbenzene
Xylene88

Hexavalent chromium
compounds

296
300

1,2,4-Trimethylbenzend
Toluene392

N-hexane

FY2020VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

Reportingrequired / notrequired〇

FY2021

VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

Reportingrequired / notrequired〇VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

Reportingrequired / notrequired

〇

1,211
9,937

463
4,075

〇

710
15,745

286
6,431

〇

2,273
10,524

928
4,298

〇

0.1

0

〇

0.1

0

〇

0.1

850 *

〇

265
100,846

95
5,520

ー

25
61,535

10
25,134ー〇〇

59
106,87324
43,652

〇

4,518

2,741

〇

601

245

〇

258

105

〇

ー

*The increase in the transfer amount of Hexavalent chromium compounds in FY2021 is due to the disposal of unnecessary materials at the renewal of factory equipment.

■ Nitec Precision and Technologies, Inc. (NPT) Himeji Factory
FY2019PRTR
No.

Name ofchemical substance71

Ferric chloride
Water-soluble copper salts(excluding complex salt)
Molybdenum and its compounds

272
453

Unit: kg

FY2020VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

Reportingrequired / notrequired

FY2021

VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

Reportingrequired / notrequiredVolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

0.0

0.0

ー

0.0

0.0

ー

0.0

0.0

ー

0.0

1,352.8〇

0.0

1,820.2〇

0.0

2,677.4

〇

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

〇

■ Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
FY2019
PRTR
No.

64
71
272
453

Nissha Sustainability Report 2022

Name ofchemical substance
Silver and its compounds(water soluble)
Ferric chloride
Water-soluble copper salts(excluding complex salt)
Molybdenum and its compounds

Reportingrequired / notrequiredVolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companiesー

Unit: kg

FY2020ー

Reportingrequired / notrequiredー

FY2021

VolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

ーー

Reportingrequired / notrequiredーVolumeDischargetransferred tovolume into the industrial waste
atmosphereprocessing
companies

ーー

Reportingrequired / notrequired

ー

0.0

0.0

○

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

○

0.0

0.0

〇

0.0

0.0

〇

ー

ー

ー

ー

ー

ー

ー

ー

ー

9-7

Contents /Editorial Policy

9-8

Nissha Group
Sustainability

Environment

Prevention of Air Pollution

9-8-1 Soot and dust and NOx emissions
Several production bases of the NISSHA Group in Japan own anduse gas boilers, which are subject to the Air Pollution Control Act,and emit soot and dust and NOx. The measured values and compliance status for FY2021 are as follows.
Soot and smoke
concentration
measurements(maximum value)

Boiler operating base

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

9-8-2 VOC emissions
The Nitec Industries, Inc. Koka Factory, a member of our group,
uses organic solvents such as toluene and xylene in its production process. Volatile Organic Compounds (VOCs) generated by
the use of organic solvents are detoxified and discharged throughdirect combustion deodorization, catalytic deodorization, andother measures.

Compliance

Soot and dust
(g/m 3N)

NOX
(ppm)

Kyoto Headquarters

0.002

25

〇

Nitec Industries, Inc.
Koka Factory

Less than
0.01

32

〇

Nitec Precision andTechnologies, Inc.
Himeji Factory

Less than
0.001

34

〇

Nitec Precision andTechnologies, Inc.
Tsu (production base)Less than
0.005

40

〇

*The Air Pollution Control Act requires that soot and dust and NOx be measured andmonitored in terms of soot concentration rather than the total amount.
*We use gas-fired boilers that do not emit SOx (sulfur oxides).

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

10. Environmental Objectives and Status of Achievement (Nissha Group in Japan)
The Nissha Group in Japan has set the Nissha Group Environmental Objectives for a period of six
years from the fiscal year ended December 2018 for those bases that have obtained ISO14001
certification. In accordance with these Objectives, each base and division establish environmental
targets, and we aggregate and assess the results each fiscal year in order to manage progress.

10-1 Initiatives and Achievements in FY2021
1. Prevention of pollution
TargetEnvironmental Objectives
Period: FY2018 - FY2023
Scope: Nissha Group in Japan ISO14001 certification sites (“certification sites”)

Assessment Definitions

FY2019FY2020

FY2021(1) Maintain zero environmental accident (accidents that affect areas outside the factory)

〇

〇

×

(2) For environmental risks classified as significant environmental aspects on the hazard assessment list, implement
measures and reduce the possibility of occurrence by one
level by December 31, 2023

〇

〇

〇

〇 Satisfactory: Objective achieved△ Unsatisfactory: Objective not achieved but good progress made× Poor: Objective not achieved and poor progress made*Company names and abbreviations
NII: Nitec Industries, Inc.
NPT: Nitec Precision and Technologies, Inc.
NCI: Nissha Printing Communications, Inc.

Nissha Sustainability Report 2022

(1) There was one leak accident in FY2021. There was a chemical leak at the NII Koka Factory, but
it did not have a significant environmental impact. In addition to appropriately reporting to relevant parties and responding to corrective guidance by the government, we thoroughly conductedtraining and strengthened measures to prevent leaks.
(2) As risk reduction measures, in addition to implementing chemical leakage response training, weare also actualizing improvements by physically raising chemical storage locations. And alongwith a continuation of rainwater control, we are implementing training for nighttime and rainy
conditions. Through these efforts, we are enhancing initiatives for environmental risk reduction.
As a result, the factory's environmental risk “potential” (the value in the environmental risk assessment) has been reduced by more than one level.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

2. Mitigation of climate change
Target

FY2019FY2020

FY2021(1) Reduce CO2 emissions rate (basic unit) by 6% or more by
the fiscal year ending December 2023

×

〇

〇

(2) Reduce CO2 emissions rate (basic unit) by 1% or morecompared to the previous year

△

〇

×

*

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

(1) Each factory is working to improve its yield rate and efficiency through quality improvement activities and reducing the amount of wasted materials by improving production efficiency. For the
fiscal year ended December 2021, because the NII Koka Factory and NPT Himeji Factory did notachieve their targets among the applicable factories, the company-wide evaluation was set to"Poor".

*Reference value: Results in fiscal year ended December 2017

(2) Targets are set according to the characteristics of each factory. For the fiscal year ended December 2021, three out of the six locations (Head Office, NPT Kaga Factory, and NCI) achieved atleast a 1% reduction compared to the previous fiscal year. However, three locations (NII Koka
Factory, NPT Himeji Factory, and NPT Kyoto) did not achieve the target.

(1) By the fiscal year ended December 2021, we have managed a drop of more than 4% of thetarget to be achieved by the fiscal year ending December 2023. This means we are still on theplanned track.

(3) The Nissha Group in Japan as a whole achieved a recycling rate of 99.9%, and has maintained
zero emission of waste (a recycling and resource reuse rate of 99.5% or more) as in the previous
fiscal year.

(2) In order to reduce the CO2 emission rate (basic unit) by at least 1% over the previous fiscal year,
we set targets for each factory and reduced energy input in conjunction with quality improvements. Three out of the six locations (Head Office, NII Koka Factory, and NPT Kaga Factory)
achieved at least a 1% reduction compared to the previous fiscal year. However, three locations(NPT Himeji Factory, NPT Kyoto, and NCI) did not achieve the target.

(4) Although it did not lead to significant cost reduction, we achieved to reuse waste as valuable resources due to enhanced separating of packaging material at the NII Koka Factory.

4. Reduction of water usage
Target3. Reduction of waste
Target

FY2019FY2020

FY2021(1) Reduce waste generation rate (basic unit) by 6% or moreby the fiscal year ending December 2023

×

△

×

(2) Reduce waste generation rate (basic unit) by 1% or morecompared to the previous year

△

△

×

(3) Maintain zero emissions (recycling and resource reuserate of 99.5% or more)

〇

〇

〇

(4) Reduce cost of waste treatment

〇

〇

△

Reduce use of water by improving production efficiency andsaving water

FY2019FY2020

FY2021〇〇〇

We improved production facilities at the NPT Kaga Factory and achieved over 1% of water usage reduction. Additionally, we were able to decrease the water usage quantity at the NPT Himeji Factorythrough water conservation efforts there. We continue to reduce water consumption and save water
for miscellaneous use by improving production efficiency at our factories.

*Reference value: Results in fiscal year ended December 2017

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

5. Reduction of chemical substances usage
TargetCertification sites reduce usage rate of chemical substances(Certification sites set individual targets)

FY2019FY2020

FY2021〇〇〇

In addition to PRTR-designated substances used in the printing process, the NII Koka Factory also reduced the use of organic solvents, which do not contain designated substances, to achieve its targetof a 1% reduction from the previous year.
At the NPT Himeji Factory, we achieved the chemical usage reduction target through facility and infrastructure improvements. Furthermore, at the NPT Kaga Factory, we strove to reduce the amount ofdrainage water treatment agent for drainage water processing and reduced the quantity by over 5%.

6. Environment-conscious design
Target

FY2019FY2020

FY2021(1) Introduce the viewpoint of energy saving, resource saving,durability, recycling, and so on in product design anddevelopment.

〇

〇

〇

(2) Design environment-conscious processes and reduce theenvironmental impact of production.

〇

〇

〇

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

(2) NII and NPT are complying with established company standards regarding the management ofchemical products, and also designing production processes that promote reduced environmental impact.

7. Enhancement of environmental performance in supply chain
TargetEnhance environmental performance based on customer
requirements and the RBA code of conduct

FY2019FY2020

FY2021〇〇〇

In consideration of feedback we received in customer-driven supplier auditing, we are continuing ourenvironmental improvement efforts. With the help of our suppliers, we respond to questionnaires
and conduct on-site inspections which reflected our customersʼ demands in relation to the environment. In addition, we examine CO2 emissions during production processes and check chemical materials used in products. Through these activities, we are grasping the environmental impacts in our
supply chain in order to contribute to environmental improvement.

(1) As a positive risk assessment (a positive environmental aspect), the design and development divisions of the Industrial Materials and the Devices businesses set development themes from theperspective of solving social issues such as SDGs and life cycle, and incorporate the reduction ofenvironmental impact at the product design stage. In addition, we are moving ahead with the development and mass production of products that contribute to reducing environmental impact,
such as the use of sustainable materials. Furthermore, we are developing a system for reused table ware utilizing IoT and striving to contribute to society through resource recycling. Nissha FIS,
Inc. also designs and develops parts that contribute to environmentally-friendly customer products, such as hydrogen detectors and coolant sensors used in fuel cell vehicles.

Nissha Sustainability Report 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

11. Human Rights
11-1 Basic Policy on Labor and Human Rights

11-2 Structure

We at Nissha Group have in place a basic policy on labor and human rights. In formulating the policy,
the 10 principles of the United Nations Global Compact, which we joined in April 2012, and the Responsible Business Alliance (RBA) code of conduct, mainly for the electronics and automotive industry,
were used as reference. In addition to Japanese, this policy has been translated into English, Chinese,
Korean and Malay, Spanish and German, and widely distributed to all Nissha Group employees.

The Nissha Group recognizes that our employees are our most important management resources.
The Sustainability Committee has identified three themes, (1) diversity, (2) human resource development, and (3) labor and human rights, in accordance with the material issues, “respect for humanrights” and “utilizing diverse human resources and improving human resource capabilities”, and wehave established the ESG Task Force to address these themes. A Labor and Human Rights Subcommittee has been established under the Risk Management and Compliance Committee to address
other important risks throughout the Group.

Basic Policy on Labor and Human Rights
Nissha Group will observe the international norms, laws and ordinances related to human rights and labor
standards and will make efforts to continually improve human rights and labor standards.
1. Child labor: We will prohibit child labor and also implement relief measures.
2. Forced labor: We will eliminate all forms of forced labor, including bonded labor.
3. Health and safety: We will secure the health and safety of our employees and provide a hygienic workplace environment.
4. Freedom of association and the right to collective bargaining: We will guarantee the right to organize
and the right to collective bargaining.
5. Discrimination: We will not discriminate based on a person ʼ s age, disability, ethnic group, gender,
marital status, nationality, political support, race, religion, sexual orientation, pregnancy or membership in a union. We will also not be party to this.
6. Punishment: We will not perform physical punishment or mental or physical coercion and we will not
engage in verbal abuse.
7. Working hours: We will observe the laws, ordinances and labor agreements related to working hours,
rest breaks and holidays.
8. Remuneration: We will observe the laws and ordinances related to the payment of appropriate wages.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd
Established on June 1, 2018

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

11-3 Initiatives Related to Laborand Human Rights
Our initiatives related to labor and human rights can be broadlyclassified into initiatives by the ESG Task Force (diversity, humanresource development, labor and human rights) to address material issues throughout the Group and initiatives by the Labor andHuman Rights Subcommittee to address risks related to compliance with international norms and laws in the area of labor andhuman rights that apply to the Group.
During the fiscal year ended December 2021, the ESG Task
Force worked on the materiality of “respect for human rights” bysetting “reduction of labor and human rights risks” as its strategy
item and “zero child labor and forced labor in the Group” as a key
performance indicator/action item. Specifically, the task force
confirmed that there is no forced labor or child labor by asking
10 domestic and 31 overseas Group affiliated companies to respond to a survey.
The Labor and Human Rights Subcommittee operates a management system, and its key performance indicators/action
items include items related to materiality issues, risk assessments
conducted at the Company-wide level, and risk assessments specific to affiliated companies.
Furthermore, we conduct internal audits once a year at major
Nissha Group production bases in Japan to check compliancewith laws and regulations and the RBAʼ s code of conduct, etc.
Specifically, in addition to checking, for example, whether thesalaries paid to full-time and temporary employees meet theminimum wages set by the prefectural governments, and whether working hours and overtime are correctly reflected in wages

Nissha Sustainability Report 2022

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

in compliance with laws and regulations and the RBA, we also
check, for example, whether items which have been noted ascorrected in previous audits continue to be complied with. Internal audit findings are reported through the report line, andwe provide support to production bases, as necessary, so that
corrective action can be taken. The results of the internal audit
conducted during the fiscal year ended December 2021 werefavorable, with no major findings relating to issues such as forcedlabor.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Initiatives for Foreign Technical Interns
Workplaces in Nissha Group that accept technical interns from
Vietnam make creative efforts in information sharing and communication toward protecting the human rights of the interns
and establishing a worker-friendly environment. For example,
when employees first join the Company, they are given opportunities to experience Japanese culture and we organize recreational activities so they can learn about local culture.

We are encouraging all employees at the Nissha Group ʼs major
production bases in Japan to take five days of annual paid leave
per year as part of our “ implementing working style reforms ”
initiative. During the COVID-19 pandemic, we introduced newworking styles, including telework and we updated our internal
regulations in response. We are implementing measures to ensure that employees can communicate effectively with each other, even when working from remote locations.

Recreational activities in the suburbs

Furthermore, we are preparing and providing signs showing
evacuation routes and the location of the medical office, notices about harassment and other consultation desks, pay slips,
and training materials, etc. in both Japanese and Vietnamese sothat both all employees and technical interns can understandthem easily. In terms of communication, senior trainees andemployees work with interpreters to provide detailed explanations.
In the fiscal year ended December 2021, six technical interns
were due to complete their training and return to their homecountries. However, the COVID-19 pandemic prevented themfrom returning home and so we extended their training at theirrespective workplaces.

11-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

11-4 Harassment Prevention

11-5 Relationship with Labor Union

We at the Nissha Group establish a set of Harassment Prevention
Regulations, which prescribe measures to prevent various formsof harassment in the workplace, with the aim of realizing soundworkplace environments in which all employees can live up to
their full potential. As a structure for promoting harassment prevention, we designate a chief promoter of harassment prevention
and hotline staff at each base. The chief promoters organize aliaison meeting, where they share information about cases ofharassment that have occurred at one anotherʼs base, introduce
their responses, and discuss practical harassment prevention,
problem solving, and measures for improvement.

Our Basic Policy on Labor and Human Rights contains the provision, “Freedom of association and the right to collective bargaining. In Japan, the labor contract concluded between company
and labor union confirms, “the Company and the Union shall respect each otherʼs position and maintain a peaceful relationshipbetween labor and management as well as strive for the maintenance and improvement of labor conditions and the growth of
the Company.” In the fiscal year ended December 2021, there
were no significant violations of freedom of association.

We have also established both an internal harassment consultation service, which is available to all employees, and an external
hotline consultation service (Refer to 21-6 Hotline). The contact information for each service is provided through the Nissha
Group intranet and e-learning, and we are working to ensurethat employees understand that the system is set up so they can
discuss issues with confidence by assuring them that their privacy
will be fully respected and that they will not be treated unfairly
or be disadvantaged for making use of these services. There were
12 consultations with the internal harassment consultation service and external hotline consultation service collectively during
the fiscal year ended December 2021 and all consultations havebeen addressed.
We use an e-Learning system to provide annual harassment prevention training for all employees and also we conduct supervisor
training for hotline staff.

Nissha Sustainability Report 2022

The Nissha Group in Japan has formed the Nissha Crew Alliance,
as a single labor union for the Nissha Group in Japan, centeredon employees of Nissha Co., Ltd., and two affiliated companies,
Nitec Industries, Inc. and Nissha Printing Communications, Inc.
(as of January 2022, there were 1,106 members). The vision of
the Nissha Crew Alliance is “ realizing new happiness ” through“new ways of working (workplace sphere), ” “new lifestyles (social
sphere),” and “new union activities (individual sphere).” It aims to
support all employees of the Nissha Group in Japan. The Nissha
Crew Alliance engages in regular negotiations and discussions
based on this concept to build stable labor-management relations
while resolving common issues in the Nissha Group in Japan.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

labor conditions of the Nissha Group in Japan, the company carries out dialogues with the union on a daily basis with the aim ofreaching an agreement satisfactory to both. During the fiscal year
ended December 2021, we shared opinions on the operationof the HRM system for general employees (which we revised theprevious fiscal year), health and productivity management, anddiversity initiatives, and we cooperated in improving existing systems and formulating new measures.
Nitec Industries, Inc. and Nissha Printing Communications, Inc.
have also established labor management liaison meetings at thecompany and office level to provide forums for labor and management to exchange opinions. Moreover, Nitec Precision andTechnologies, Inc. has established the Workplace Improvement
Committee, with members from both labor and management, towork on promoting improvements in the workplace environment
and in welfare benefits.
In fiscal year ended December 2021, the Nissha Group in Japan
had no report either of a strike or lockout. We will continue to respect the mutual positions of both company and union, and build
a sound relationship between labor and management.

The Management Council, whose members are mainly directors
and corporate officers of Nissha Co., Ltd., holds regular meetings
with the Nissha Crew Alliance. In addition to negotiating and discussing employee working conditions, the Council shares information on the management of the Nissha Group. Furthermore, thelabor and management offices strive to prevent labor problems
by regularly sharing employeesʼ opinions on the working environment and the working hours situation. When changing important

11-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

12. Human Resources12-1 Human Resources System

12-1-2 New Human Resources System

12-1-1 Human Resources Policy
We at Nissha Group recognize that our employees are our most important management resources.
With the start of the 7th Medium-term Business Plan, we have formulated and started to roll out
a Human Resources Policy. This policy outlines our fundamental approach to human resources
measures. Our human resources-related systems and development are implemented based on thispolicy.

Human Resources Policy
Nissha Group aims for growth both for the company and employees through diverse capabilities andpassion, seeing changes in the business environment as opportunities for growth.
1. We shall develop employees who embody Nissha Philosophy and contribute to society through ourbusiness activities.

Based on the idea that company growth leads to employee growth, and employee growth to company growth, the Group has overhauled its human resources system, which still had elements ofseniority-based hierarchy, and started operating a new system focused on roles and abilities in linewith the 7th Medium-term Business Plan (FY2021–FY2023).
In this new system, the required skills are clearly stated, and employees demonstrating the skills
required by the company will be given a fair chance to be promoted, regardless of age or length ofservice. In the human resources system for general employees, we have greatly improved the treatment of employees who hold key positions and introduced a multi-track human resources system
based on expected roles. In addition, the actions expected of the managers who direct these employees have been clarified as managerial competencies consisting of the ability to change (leadership) and the ability to execute (management).
Each employee carries out their duties with an awareness of the abilities required based on theirposition, and receives feedback from their supervisor on the gaps with the abilities actually demonstrated in the semi-annual performance review. This encourages the growth of each employee,
which in turn leads to further growth for the company.

2. We shall respect diversity of employees and utilize their individuality and strengths.
3. We shall emphasize global teamwork to achieve results.
4. We shall encourage proactive actions and unconventional innovation.
5. We shall provide rich training programs and challenging growth opportunities.
6. We shall create a workplace full of energy where employees feel safe to work.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on January 1, 2021 / Revised on May 1, 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

① Diversity

12-1-3 ESG Task Force Initiatives
The Nissha Group has identified three themes, (1) diversity, (2) human resources development,and (3) labor and human rights, in accordance with the material issues of “utilizing diverse humanresources and improving human resource capabilities” and “respect for human rights”, as social (S)measures to realize our Sustainability Vision, and we have established the ESG Task Force to addressthese themes. For each theme, we have set key performance indicators on a global basis for where
we see ourselves in 2030 (Long-term Vision or Sustainability Vision) and where we want to be inthree years (Medium-term Vision), and backcasting from these, we set annual activities targets andwork to carry them out.
Key Performance Indicators for 2023

Key Performance Indicators for 2030

1. Diversity

Female manager ratio
Global consolidated: 21%
Nissha: 8%

Female manager ratio
Global consolidated: 24%
Nissha: 16%

2. Human
resourcesdevelopment

Selection rate of leadership candidates
Nissha: 36%

Selection rate of leadership candidates
Nissha: 50%

3. Labor andhuman rights

Identify primary suppliers, based onpurchasing records, in areas identified by
the ILO as having high labor and humanrights risks, and complete audits

Identify audit targets based on annual
purchasing results and continue to perform audits

Zero child labor and forced labor

Fair Operating
Practices

Zero child labor and forced labor

Although the definition of managerial staff varies between countries, we have adopted a new standardized definition of managerial staff on a global basis, and we monitor the situation regularly.
At the end of the fiscal year ended December 2021, the ratio of male to female employees in theGroup was approximately 6 (male) to 4 (female), but the ratio of male to female managerial staff
was approximately 8 (male) to 2 (female), which indicates a discrepancy. We are working on a project to promote the advancement of women on a global basis in order to bring the ratio of female
managerial staff, a key performance indicator, closer to the ratio of female employees by 2030.

② Human resources development
As indicated in our Human Resources Policy, the Group is aiming to maximize employee capabilities and achieve sustainable growth by providing full training programs and challenging growth
opportunities. We will continuously increase our pool of management and strategic personnel by
setting, as a key performance indicator, the selection rate of employees who learn business management skills at the Nissha Academy Business School (beginner and intermediate levels), which is
the gateway to managerial staff. On non-consolidated basis, Nissha will increase the selection rateof such leadership candidates to 50% by 2030.

③ Labor and human rights
At Nissha Group production bases in Japan, the Labor and Human Rights Subcommittee is working
on “understanding and reducing human rights risks,” while the ESG Task Force is working on “understanding and reducing human rights risks” at Nissha Group domestic and overseas bases andtheir primary suppliers. We will start by confirming that there is no use of child labor or forced laborin our Group, and we will then audit our Groupʼs primary suppliers in the regions where we do business, focusing on regions with high incidence of labor and human rights risks (Central and SouthAmerica, Southeast Asia, and Greater China).
Refer to 11-3 Initiatives Related to Labor and Human Rights

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

12-1-4 Talent Management System

12-1-6 Wage Management

We recognize that our employees are our most important management resources, and we have introduced a talent management system to grasp the abilities of each employee and makethe most of their individuality and strengths.

Wages and other compensation for labor are appropriately stipulated in the wage rules of each affiliated company and in individual contracts in accordance with the laws and regulations ofeach country. The Nissha Group makes no distinctions based onage, gender, or other factors.

12-1-5 Fair Evaluation and Treatment

The gap between male and female in terms of wages in the fiscal
year ended December 2021 is shown below. The figures show
a comparison of female with a male base salary and compensation set at 100.

The Nissha Group considers rewarding employees for theirachievements to be the foundation of our human resources
system. In our personnel evaluations, and based on the target
management system, employees are evaluated on the two axesof “performance evaluation, ” which evaluates key performanceindicators related to the company ʼs management strategy andthe mission of the organization to which they belong, and “behavior evaluation,” which focuses on demonstration capabilities
required to create results. The results are reflected in bonuses,
salary increases, promotions, and other benefits. We present
clear evaluation criteria to employees and employees meet with
their supervisors to receive feedback on our expectations andevaluations when setting goals at the beginning of the term andwhen conducting evaluations at the end of the term. We placeemphasis on dialogue for mutual understanding, and devise
ways to ensure more fair and convincing evaluations and treatment.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Base salary, working for Nissha Co., Ltd.
Managers(excluding directors)

Generalemployees

Male

100

Female

102

Male

100

Female93

Remuneration*1, working for Nissha Co., Ltd.

Managers(excluding directors)

Generalemployees

Male

100

Female

99

Male

100

Female85* Treatment is the same for male and female. The difference is due to differences in the grade
structure resulting from the distribution of the age structure between male and female.
*1. Base salary paid to workers plus other payments. Includes bonuses, overtime allowance,
commuting allowance, and family allowance, etc.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance■ Composition by employment status (Nissha Group, as of the end of December 2021)

12-2 Respect for Diversity

Composition by employment status and gender
The Nissha Group has a set of Shared Values that serve as the principle of employee behavior seeking to realize our mission. One of those values, Diversity and Inclusion, declares, “ We welcome
diverse capabilities interacting as equals and enhancing our organizational performance.” To growas a global company, we respect diverse work styles by diverse human resources, and aim to create
workplaces in which all employees can perform to their full potential.

12-2-1 Nissha Group Employee Composition

Permanent
NumberTemporary
NumberComposition (%)

Composition (%)

Male

3,470

64.2

866

60.0

Female

1,939

35.8

577

40.0

Total

5,409

―

1,443

―

* Figures exclude directors by a delegation agreement.

The diversity of the Nissha Group shows in our employee composition in terms of gender, age, andemployment status. With the expansion of our activities across the globe, about 60% of permanent
employees work at Nissha Group companies outside Japan. We hire a diverse range of people on a
global basis. Locally hired employees are appointed to upper management positions such as CEO atmultiple Nissha Groupʼs overseas bases, where they are deeply involved in management.

■ Composition by region (Nissha Group, as of the end of December 2021)

Number of employees by region and gender
Area

Japan

North America

Central and SouthAmericaAsia

End of
FY2017

873

206

312

505

Female

416

666

315

349

193

1,539

* Figures exclude temporary employees and directors by a delegation agreement.

521

GenderDirectors of
the Board*1

Corporate
officers

Male

7

15

Female

1

Male

661

698

End of
FY2019End of
FY2020End of
FY2021

Nisshafellows

Averageage*3

Averageyears ofemployment*3

Managerial
staff

Total
employees*2

1

165

603

41.8

14.1

0

0

9

188

35.9

10.7

8

12

1

161

616

42.1

14.5

Female

1

0

0

11

203

36.5

10.7

Male

8

12

1

162

609

42.9

15.3

Female

1

0

0

10

210

36.7

11.0

Male

8

11

2

145

531

43.0

15.4

Female

1

0

0

8

189

37.3

11.5

Male

8

12

2

157

534

43.8

15.6

Female

1

0

0

9

197

37.8

10.8

Europe

1,574

1,990

Fiscal YearEnd of
FY2018

Male

Total

■ Employee Composition (Nissha Co., Ltd.)*1. Directors include Independent Outside Directors of the Board.
*2. Employees exclude temporary employees.
*3. Average age and average years of employment indicate the average number of employees included in total employees.

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources■ Composition by age (Nissha Co., Ltd., as of the end of December 2021)
Age

18-19

20-29

30-39

40-49

50-59

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

12-2-2 Employment of Persons with Disabilities
60-69

Male

0

42

135

218

134

5

Female

2

40

82

51

21

1

■ Number of employees (Nissha Group)
FY ended
Dec. 2017

Fair Operating
Practices

The Nissha Group is working to achieve the employment rate for people with disabilities at companies with the number of employees that are subject to the employment rate system for people withdisabilities set by the government. To ensure that employees with disabilities can work with peaceof mind, we provide support from outside specialists such as job coaches, help them develop theirskills, and hold regular interviews with Human Resources at least once a year.
The following shows the changes in the employment rate of persons with disabilities in our company.

FY ended
Dec. 2018

FY ended
Dec. 2019

FY ended
Dec. 2020

FY ended
Dec. 2021

Male

3,597

3,832

3,692

3,432

3,470

Female

1,725

2,012

2,026

1,958

1,939

Total

5,322

5,844

5,718

5,390

5,409

Although the percentage of persons with disabilities employed was low in 2021 due in part toretirements, we will continue to work systematically to achieve and maintain our target for percentage of persons with disabilities employed and thus achieve diverse working styles with diverse
human resources by creating opportunities to hire and employ persons with disabilities throughstrengthening cooperation with special-needs schools and other external organizations, introducing internships that include persons with disabilities, and creating a comfortable work environment.

* Figures exclude temporary employees.

Of all permanent employees who left Nissha Group companies in Japan in the fiscal year ended December 2021, 2.01% left for personal reasons.

■ Composition of managerial staff (Nissha Group in Japan)
FiscalYear
End of
FY2019End of
FY2020End of
FY2021

Male

FemaleOf which midOf which
carrier employees foreign employees

Total

Number

339

15

354

87

2

Composition
ratio (%)

95.8

4.2

―

24.6

0.6

Number

289

13

302

86

2

Composition
ratio (%)

95.7

4.3

―

28.5

0.7

Number

304

16

320

94

2

Composition
ratio (%)

95.0

5.0

―

29.4

0.6

Nissha Sustainability Report 202212-2-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

12-2-3 Foreign Employees in Active Roles

12-2-4 Promotion of Women's Advancement

We hire people regardless of nationality in accordance with the“Diversity and Inclusion” part of our Shared Values. In our Group,
where a diverse range of people play active roles, foreign nationals account for 63.2% company-wide.

The Nissha Group aims to be a company where all employees,
regardless of nationality, gender, age, and more, can exercise
their abilities to the full.

Hiring of new graduates and mid-career employees at Nissha
Co., Ltd. is shown below.

Total
numberof hires

New graduates

Mid-career

Total
Foreign
Total
Foreignnumber nationals number nationals

Country

Starting in the fiscal year ending December 2021, our Grouphas identified utilizing diverse human resources and improving
human resource capabilities as a materiality. To that end, we
have made promoting female advancement a strategy item andthe ratio of female managerial staff a KPI, for which we have set
targets of 21% for global consolidated companies and 8% for
Nissha on a non-consolidated basis by 2023.

1

Uzbekistan,
Malaysia

Refer to 12-1-3 ESG Task Force Initiatives

30

Malaysia, Indonesia, Vietnam,
IranFemale managers ratio

8

0

―

FY
2018

45

24

1

21

FY
2019

21

18

4

FY
2020

20

12

0

FY
2021

29

FY2020

11

0

18

0

―

We have set up a worship room in our Kyoto Head Office thatcan be used by people of any religion or sect. There is also asmall purification facility to purify the body before worship,
which is used regularly every day.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Action Plan for the Japanese Act on Promotion of
Womenʼs Participation and Advancement in the

Workplace
The Japanese Act on Promotion of Women ʼ s Participation andAdvancement in the Workplace requires companies with 301 or
more employees to draft an action plan for promoting womenʼsparticipation in business. In the Nissha Group, three companies
fall under this category: Nissha Co., Ltd., Nitec Industries, Inc.,and Nitec Precision and Technologies, Inc. One more company,
Nissha Printing Communications, Inc., has voluntarily formulated an action plan.
In line with the action plans based on the Womenʼs Participation
Act, moving forward, we will continue to upgrade our initiatives
so that all employees can live up to their full potential.

FY2021

Nissha Group
（%）

19

20

NISSHA（%）

5

6

We opened a career counseling office in 2021, where women
can get support for career planning that accommodates theirlife events.
Over the 7th Medium-term Business Plan (3 years; FY2021.12
to FY2023.12), we provide challenging growth opportunities forfemale employees by enhancing selective training and company-wide common training items for each grade, and systematically develop candidates for upcoming managerial staff positions
through personnel rotation.

Nissha Sustainability Report 202212-2-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

12-3 Human Resources Development
The Nissha Group regards the source of the company's strengths
as "employees", and are working on human resource development based on the "Human Resources Policy".

12-3-1 Basic Concept
The Nissha Group is systematically working to develop humanresources to realize our medium- to long-term growth strategy, and we have established training programs to support ouremployees ʼ medium- to long-term career development andpromote their growth. Specifically, we have established selective
training programs to develop candidates for the next generationof management, rank-specific training programs that match theemployeeʼs stage, function-based training programs to provide
specialized knowledge according to job type, and career design
training programs tailored to employees ʼ life stage. Throughsuch human resources development initiatives, the Group aims
to see the company and our employees grow together.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

12-3-2 Training Systems■ Rank-specific training

At Nissha Group, the first three years after new graduates enter
the company are positioned as the initial training period. After
joining the company, new graduates undergo a new employee
training (group training, business unit training, and factory training; refer to the followings) before being assigned to a businessdivision. Three years after joining the company, new employees
are rotated across job categories and divisions to gain a wide
range of experience, helping them to grow step by step.
After joining the company in April, employees take group training, business unit training, and factory training.

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Group
training

Employees learn how to act as members of society, business manners, and the basic skills for carrying out theirwork. In addition, through lectures and group work, employees learn the Nissha Philosophy, strategies, businesses,
technologies, basic manufacturing concepts, and company
rules that they should understand as employees of the Nissha Group.

Business
unit
training

Employees learn how to build up core technologies andcorporate values tied to business. Through lectures andgroup work, employees deepen their understanding of theroles and work of the divisions (functions) that make up abusiness unit.

Factory
training

Employees visit actual factory production sites to train in
manufacturing under the guidance of senior employees.
Through hands-on work, employees learn to understandtechnology and production processes, as well as quality,
safety, and other important aspects of a manufacturing
company.

Human Resources department takes the lead in providing
rank-specific training according to qualification grade, age, position, and experience.

New employee training

Human Resources■ Selective training
We carry out selective training with the object of systematicallytraining the human resources necessary to achieve our mediumto long-term growth strategy, including training candidates forthe next generation of management executives.

Business School
Nissha operates a Business School to systematically train humanresources who will lead the management of the entire company
and its businesses. This program covers the knowledge and skills
involved in developing and implementing business strategies.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

practice, including participating in projects and formulating medium-term management plans.
The Business School offers beginner (leaders in the workplace),intermediate (gateway to managerial staff), and advanced (senior managerial staff ) level programs. The intermediate andadvanced programs are original programs that combine MBAbased lectures by professors from graduate schools of management with lectures based on practical case studies by in-house
instructors.

Executive MBA program and a graduate school program
for working professionals
We also offer an external Executive MBA program (for officers)
and a graduate school program for working professionals (forfuture officer candidates) as training programs that rank above
the Business School. These programs are mainly used to acquire
new skill sets in anticipation of a change in position that involves
a major change in perspective or viewpoint.

Overseas trainee system
We have an overseas trainee system for developing young human resources (from both liberal arts and science backgrounds)
who can flourish in global business settings regardless of their
job type. Employees are selected internally from their third year
on and spend about one year in a local subsidiary. By working atoverseas subsidiaries in Europe, America, or Asia, they can improve their specialized skills, language abilities, and intercultural
adaptability with the goal of becoming global leaders, including
candidates for overseas postings, in the future.

After graduating from the School, employees will be actively
provided with opportunities to put what they have learned into

Nissha Sustainability Report 202212-3-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment■ Function-based training
Training is provided to employees to allow them to acquire theknowledge and skills required for their job type (function), suchas engineering, production, purchasing, etc.

Priority market skills training (reskilling)
Priority market skills training (reskilling) is designed to expand
employeesʼ skills for doing business in priority markets.
Our 2030 sustainability vision has identified medical and mobility as priority markets. For us to be successful in new areas, it isessential for employees to acquire the necessary knowledge andskills to fit our capabilities into the new markets.
Our training program consists of three levels, common subjects
for engineers, design subjects, and specialized subjects by thetarget market. The lineup includes a wide range of subjects toenable employees to learn everything from the basics up to specialized content. We plan to conduct this six-month program a
total of four times during our 7th Medium-term Business Plan
(FY2021.12-FY2023.12).

Common training for engineers
The technical knowledge required
to meet the needs of global customers is taught from the dual
aspects of the “ core technologies ”
that are our strengths, and the science-based “common engineering”
knowledge (quality, statistics, intellectual property, etc.) that all
engineers, regardless of where they work, should be aware of.
Employees are taught all this, from introductory to applied fields,in line with their individual experience and knowledge levels.

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

In order for us to continue to grow while changing our target
markets and products, we train engineers who can create products that come with “ Nissha ʼ s unique strengths ” beyond theboundaries of business units.

12-3-3 Support for Employees' Voluntary Desires to Learn and Grow
We have established a system to support self-study for the purpose of encouraging employees to voluntarily seek opportunities
for study, and to enhance their education or gain knowledge
about the Company's business. Employees are free to choose
from a variety of distance learning and e-learning programs thatmatch what they want to learn. Moreover, this voluntary selfstudy is supported through subsidies of half the fees for those
who complete their courses.

12-3-4 Career Planning Support
Since the fiscal year ended December 2019, we have been providing career training annually for full-time employees in their
50s. All full-time employees aged 50-59 have completed thistraining, which is designed to help them understand changes inthe external environment, company systems, and their own values and strengths (as of December 31, 2021).

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

number of hours by the number of employees.
In the fiscal year ended December 2021, these two indicators
grew significantly due to running a selective human resource development program which we hold once every three years, and a
new priority market skills training program.
FY2019Total
training
hours peryear

Training
hours peremployee

FY2020

FY2021

Male

17,76819,092

28,928

Female

4,497

7,245

13,498

Total

22,26526,33742,426

Male

9.6

11.8

16.4

Female

10.0

17.9

24.0

Total

9.7

13.1

18.2

*Training hours per employee are calculated based on the number of full-time employees of
the Nissha Group in Japan.

Training records

12-3-5 Training Records
The table on the right shows the total training hours per year of
employees (full-time and contract) who participated in major
training programs offered by the Nissha Group in Japan andthe training hours per employee, obtained by dividing the total

12-3-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

12-3-6 In-house Training Programs
The Nissha Group values an organizational culture in which senior employees train junior employees and encourages in-housetraining programs. Instructors are primarily managerial staff who
share their experience and knowledge with other employees. In
addition to expanding personal connections among employees, through this initiative more employees are rediscovering
Nissha ʼ s strengths and attractiveness, and our organizational
strength and sense of unity are improving. We previously had
employees take part in external training programs in areas inwhich we have not accumulated knowledge in-house, as we
accumulate knowledge in these areas we are gradually creating
training programs in-house. This ratio varies from year to year,
but we are aiming to achieve a 50% in-house training ratio.

In-house training programs ratio

Nissha Sustainability Report 202212-3-6

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

12-4 Employee Engagement

12-4-3 Child-rearing and Family Care Support

Nissha Group has established Diversity and Inclusion as one of the
Shared Values, which is the principle of employee behavior, and is
working to create a workplace where human resources with diverse
values and diverse backgrounds can maximize their abilities. At Nissha Group in Japan, we are implementing work style reforms withthe aim of improving productivity, along with enhancing various
support systems and promoting the creation of a workplace that
supports diverse and flexible work styles. These are some of the ways
we provide support to help our employees achieve a work-life balance.

We are enhancing the support system for child-rearing and family care for the flexible working styles of employees at various life
stages.

12-4-1 Flexible Work Hours
We have introduced a flextime system to promote work-life balance,
as well as to flexibly accommodate the time difference between
Japan and overseas, enabling working styles that meet both theneeds of our customers and variations in business demands. Many
employees, not only in sales divisions, but also in the development,
engineering, and administration divisions, make use of this system.

12-4-2 Telework System
A telework system was introduced in 2014 to promote effective
and flexible working styles for employees. In the fiscal year ended
December 2020, by expanding its scope from employees withchild-rearing and family care responsibilities to any employee who
can perform the same level of work at home as at the office, thesystem is now also an indispensable part of our BCP response in theevent of transportation disruptions or disasters. The system proved
especially useful during the COVID-19 pandemic. In the fiscal year
ended December 2021, we began providing telework allowances to
employees who worked from home for the entire day.

Nissha Sustainability Report 2022

■ Major child-rearing support system
By drafting an action plan and executing a range of measures
based on the Act on Advancement of Measures to Support Raising
Next-generation Children, many of our efforts in child-rearing support exceed statutory guidelines.
Support system

Nissha Group in Japan

Shorter hours
during pregnancy

During pregnancy (up to maternity leave before
childbirth)
Up to 3 hours per day―

Child-rearingleave

Up to 2 years old

As a rule, up to 1 year
old (2 years old whencertain conditions are
met)

Days off for
spouseʼs childbirth

5 days at the time of spouseʼschildbirth(Special paid leave)―

Shorter hours forchild-rearing

Up to completion of elementary school
Up to 3 hours per day

Up to 3 years old
By effort: Start of elementary school

Days off forchild nursing

1 child: 5 days
2 or more children: 10 days
Up to start of elementary
school: paid
From the first to sixth grade:
unpaid1 child: 5 days
2 or more children: 10
days
Either paid or unpaid
Up to start of elementary schoolChild-rearing
support fundAmount: 150,000 yen (foreach occasion below)
Period:• Birth• Start of elementary school• Start of junior high school• Start of senior high school• Start of technical college

Statutory coverage―

Third Party Verification / GRI
Standards Content Index / ESG Data

GovernanceIn addition to the above, we have introduced a system to provide
financial support to female employees who return to work by theend of the month in which their child turns six months old andwho meet certain requirements, and a system to cover part ofthe expenses of a private day-care facility to support early reinstatement after childcare leave.
We also have in place a program in which employees may save up
to 30 days of expired annual paid leave to be used in the event of
illness or injury, either of the employee or a family member, andfor child-rearing, family care, school events, and closure of kindergarten or school.

■ Number of employees who used child-rearing

support (Nissha Group in Japan)
The number of employees who used child-rearing leave, worked
shorter hours for child-rearing, and took days off for child nursing are as the table below. In order to help employees make effective use of our support systems, we notify both the employee
and his or her manager of the various systems immediately after
birth registration is filed. The number of male employees using
child-rearing systems is increasing year after year.

SupportsystemGender

FY2017FY2018FY2019FY2020

FY2021Child-rearing Male
leave
Female

7

14

18

19

21

40

45

43

50

46

47

59

61

69

67

9

8

7

2

2

75

81

90

93

87

84

89

97

95

89

62

67

79

56

49

67

78

78

64

59

129

145

157

120

108

Total
ShorterMalehours forchild-rearing Female
Total
Days off forMalechild nursing
FemaleTotal

12-4-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

The reinstatement rate and retention rate (1 year) afterchild-rearing leave are given below. Many employees are reinstated after taking leave and continue to work in the Nissha Group.

Reinstate- *1ment Rate(%)
Retention
rate*2 (oneyear) (%)

Gender

FY2017FY2018FY2019FY2020

FY2021

Male

100.0

100.0

100.0

100.0

100.0

Female

100.0

100.0

100.0

100.0

100.0

Male

88.8

83.3

100.0

92.0

83.3

Female

100.0

100.0

90.0

88.6

91.3

*1. Number of employees reinstated after child-rearing leave in the current fiscal year ÷ Numberof employees expected to be reinstated after child-rearing leave in the current fiscal year x 100*2. Number of employees remaining at the end of December in the current fiscal year after being
reinstated after child-rearing leave in the previous fiscal year ÷ Number of employees reinstated after child-rearing leave in the previous fiscal year x 100■ Major family care support systems
Support system

Nissha Group in Japan

Statutory coverage

Family careleave

Total 240 working days

Total 93 days

Shorter hours
for family care

Until the reason for homecare has passed
3 hours per day

At least 3 years fromstart of use

Days off forfamily care

1 family member: 5 days

1 family member: 5days
2 or more family
members: 10 days
Either paid or unpaid

2 or more family members:
10 daysPaid

In order to appropriately respond to inquiries and offer consultation about certification of needed long-term care and long-termcare insurance, we have established a help desk that connects toan external specialist.

Nissha Sustainability Report 2022

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Number of employees who used family care support

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Kurumin Certification

system (Nissha Group in Japan)
The table below shows the number of employees who used the
support system for family care leave, shorter hours for familycare, and days off for family care.
SupportsystemFamily careleave
Shorterhours forfamily careDays off forfamily care

Gender

FY2017FY2018FY2019FY2020

FY2021

Male

0

1

3

1

0

Female

1

0

1

0

0

Male

0

0

0

0

0

Female

1

1

1

0

0

Male

9

8

12

8

5

Female

7

8

5

7

1

■ Work-life Balance Support Guidebook

We created a Work-life Balance Support Guidebook containing information on both in-house and outside systems forchild-rearing and family care and distributed to all employees.
The guidebook is published on the Nissha Group intranet andswiftly revised in the event a system changes, enabling our employees to access up-to-date information at all times.

Nissha has received “Kurumin” certification for three consecutive terms since the fiscal year ended March 2010, and in March
2019 we were certified with Platinum Kurumin.
Based on the Act on Advancement of Measures to Support Raising Nextgeneration Children,“Platinum Kurumin” is a system tocertify companies that have already obtained Kurumin certification in recognition of their measures to support employeeswith children and are carrying out initiatives at an even higher
level. This certification was in recognition of our introduction ofsystems to support a balance between work and childrearing forboth men and women, our initiatives to reduce overtime work,
our ongoing seminars on topics related to the promotion of
women in the workplace, and so on.
Within the Nissha Group, Nissha Business Service Co., Ltd. received Kurumin certification in 2015, followed by Nitec Precision and Technologies, Inc. in 2016.
We shall continue aiming to create a workplace where each
employee can work energetically, enjoying a rich life where workand child-rearing are balanced.

12-4-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

12-4-4 Promotion of the Use of Annual Paid Leave
We have a program designed to encourage employees to plantaking four days of paid leave a year, two days each in the firstand second halves; and offer a further two days in which employees may request to take paid leave on their birthday or wedding anniversary, or that of a family member. The average number of days of annual paid leave taken in the fiscal year ended
December 2021 exceeded 11 days, thanks to ongoing efforts topromote the use of annual paid leave, including disseminatinginternally via the Nissha intranet, as well as registering a yearʼsworth of annual paid leave in advance, and distributing the results to division managers to ensure that employees take leave.
In October 2019, we introduced annual paid leave by the hour
as a system for facilitating more flexible use of annual paid leaveand supporting our employeesʼ efforts to balance child-rearing
and family care with work. This system is widely used by employees.

■ Average days and percentage of annual paid leaveused (Nissha Group in Japan)
Fiscal Year

FY2017FY2018FY2019FY2020

FY2021

Average
days

10.2

11.0

12.2

11.4

11.5

Percentage of
use

55.9

60.4

65.9

61.4

60.3

Nissha Sustainability Report 2022

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

12-4-5 Outpatient Sick Leave System(Nissha Group in Japan)

FY2017FY2018FY2019

Third Party Verification / GRI
Standards Content Index / ESG Data

12-4-7 Managing Overtime WorkIn fiscal year ended March 2016, we introduced an outpatient
sick leave system with the aim of supporting employees who require long-term outpatient treatment to continue working. The
system enables employees with specified disorders to take 12days off per year for treatment. Six employees used the systemin fiscal year ended December 2021.
Fiscal Year

Governance

FY2020

FY2021

Male

2

1

1

2

3

Female

1

1

2

2

3

Total

3

2

3

4

6

Nissha Group in Japan promote the reduction of overtime work
as a way to improve productivity and help our employees achievea work-life balance. We are continuing our efforts to inform employees of their overtime hours. In the middle of each month,
the attendance system that notifies division heads of overtime
hours recorded sends out e-mail alerts to individual employees
and their division head if an employee ʼ s overtime hours in a
day or month exceed a given amount. In the fiscal year ended
December 2021, we provided training to managerial staff andgeneral employees to educate them about managing working
hours amid changes in the way employees work brought about
by the COVID-19 pandemic.

12-4-6 Support for Reinstatement afterLong-term Leave
For employees reinstated at work after long-term leave due
to illness or injury, we have introduced rehabilitation work toprevent recurrence and support a smooth return to work. After
returning to work, we ask employees to submit periodic reports
to check on their status, and they also have interviews with ourindustrial physicians to check on anything that requires special
allowances in employment. For employees to whom paid leave
was not granted during long-term leave, three days of paid leave
are granted when the employeeʼs attendance at work is at least
95% for a period of three months after reinstatement.

12-4-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

12-4-8 Employee Engagement■ Engagement survey

For employees to work passionately and for the company and employees to grow together, we believe it is important for the company to improve employee engagement by putting in place a systemthat encourages this and fostering an organizational culture that is easy to work in. As one of these
efforts, an engagement survey was conducted for the first time from March to April 2022, targeting
all permanent employees (approximately 1,900) working for the Nissha group companies in Japan.
The purpose of this survey was to identify issues that will improve the diverse capabilities and passions of Nissha, the source of our growth.

Engagement survey results
Response rate 87.9%

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

The positive response rate for willingness to contribute to the organization and organizational commitment is high. This may be related to the fact that our Mission has been widely disseminatedand is strongly identified with. On the other hand, when limited to their own work, the respondents
found it somewhat more difficult to feel a sense of fulfillment and contribution to society. Goingforward, we will analyze and develop these factors at the business and workplace level and promote
specific actions. We will expand the engagement survey to overseas Group companies during 2022
and collect results globally. We will continue to implement initiatives and make improvements toenhance a culture in which all employees work with passion.

■ Post-training surveys
The Group is enhancing its training system to match our employeesʼ stages in order to systematically develop human resources to realize our medium- to long-term growth strategy.
Questionnaires are administered after training is complete. We provide opportunities for employees
undertaking training to participate and communicate with each other, including opportunities to
identify training issues and suggest improvements for future training sessions, and we answer questions about lecture content and follow-up on issues that instructors have noticed. We use feedback
from participants to confirm the effectiveness and issues of training content and we make improvements to make the training even better as part of the PDCA cycle.

*Positive response rate: Percentage of respondents who responded positively to the question.

Nissha Sustainability Report 202212-4-8

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

12-4-9 Internal Job Posting System

12-4-10 Awarding System (Nissha Group)

12-4-11 Career Resumption Program

Nissha Group introduced an internal job posting system with theaim of providing employees with the opportunity to choose theirown career path as well as appointing employees to positions
that reflect their aptitude and thereby enhancing our organizational strength. Under this system, we first recruit the humanresources needed for divisions and operations that we focus
on, such as priority markets and businesses with high commercialization potential, from the perspective of management
strategies such as medium-term business plans. Employees whomeet the requirements apply on their own initiative and thosethat pass the selection are transferred to the relevant division.
Employees transferred through internal recruitment are playing
active roles in their divisions.

Nissha Group established various awarding systems for employees. These systems aim to praise the recipients of the awards
and motivate the company and organizations as a whole by clarifying the requirements that the company should praise and by
widely disseminating facts that correspond to such requirements
through the company and organizations.

This program supports former employees who resigned due tolife events such as childbirth, childcare, or nursing care, or for
personal reasons such as job change, by giving them the option
to return to work for the Nissha Group.

■ Implementation status of internal Job posting sys-tem (Nissha Group in Japan)
Fiscal Year

FY2017FY2018FY2019FY2020

FY2021

Number of job
postingNooffering

15

9No
offering

15

Female

―

2

4

―

6

Total

―

1

1

―

1

Successful
applicants(transferees)Awards won in the fiscal year ended December 2021 are as follows.
Number of
winners

Type

Content

CEO's Award(Company-wide)

For employees who have made significant contributions to the consolidated
performancen/aCEO's Award(Group Companies)

For employees whose sales and operating profit greatly exceed the previous year's level and plan, or who havecontributed to the bold and dynamic
execution of business strategies

10

BU HeadʼsAward, Directorʼs Special
Award

For employees who have madesignificant contributions to businessperformance or strategy

35

Synergy Award

For employees who have created synergies across regions and businesses

32

New HopeAward

For domestic employees who act
proactively without fear of failure orchange as workplace heroes

13This enables us to draw on the range of experiences, knowledge
and skills that former employees who are already familiar withour corporate culture and business have acquired outside thecompany, such as at other companies. It allows them to play
active roles again as human resources with diverse values andcareers.

This system is used throughout the entire Nissha Group, withrecipients including employees at overseas bases. As part of thecompany ʼ s efforts to create synergy, we encourage movement
across business units and divisions, so many employees who
have contributed to cross-sectional projects have been selected.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

12-4-12 Employee Stock Ownership Plan / J-ESOP

12-4-13 Retirement Pay System

As part of our efforts to provide employees with incentives toincrease the corporate value of the Group and to support medium- to long-term asset formation, we operate an employee
stock ownership plan for full-time and contract employees of
the Nissha Group in Japan.

As part of our retirement pay system, we have introduced a defined contribution pension plan in addition to a defined benefit
pension plan to support our employees' life planning and money
planning. Under the defined contribution pension plan, in addition to the Company's contributions, employees can voluntarily
add their own contributions, which are then invested by the employees themselves.

In addition, we introduced a Stock Benefit Trust (Employee
Shareholding Purchase-type) in the fiscal year ended December
2020. The system allows all employees and contract employees
who join the stock ownership plan to receive the benefits of therise in the stock price of the Company's shares for three years.
As of the end of December 2021, 27.5% of the employees havejoined, and together hold 0.8% of the Company's shares.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

When receiving retirement pay, employees can choose the age
when they start to receive benefits (between 60 and 70 years
old) and the method of receipt (lump-sum payment or a pension
from a financial institution).

■ Subscription Status of Employee Stock Ownership

Plan
Year

2017

2018

2019

2020

2021

Number of eligible subscribers

2,387

2,413

2,353

2,089

2,081

Number ofsubscribers

585

598

625

543

573

Subscription rate

24.5

24.8

26.6

26.0

27.5

In addition, in the fiscal year ended December 2020, we introduced a Stock Benefit Trust (J-ESOP) for employees of the Company and some of its subsidiaries.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

12-5 Safety and Health of Employees
12-5-1 Safety and Health■ Policy and Principles
The Nissha Group has established a Basic Policy for Occupational Health and Safety and Basic
Principles for Occupational Health and Safety which outlines specific actions and disciplines, andhas informed all employees of their content, aiming to ensure the health and safety of all people
involved in our business activities.

Occupational Safety and Health Policy
Nissha Group places safety first in its business activities and continues to actively work on areas such as improving
the working environments and health of Nissha People, remaining a company where Nissha People can remain
healthy in both physical and mental.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Safety and Health Management System
Under the Risk Management and Compliance Committee, the Nissha Group in Japan operates its
own environmental, health and safety management system based on ISO, that includes compliancewith relevant laws and regulations as well as items requested by customers, and strives for the continuous improvement of safety and health activities. The Safety and Health Committees established ateach base are formed from representatives from the base, such as the safety manager and the healthmanager, along with employee representative members selected from the Nissha Crew Alliance (labor
union) and workplaces. The Committee is responsible for responding to occupational accidents andimplementing corrective measures, as well as bringing about safe and comfortable workplaces.
The Nissha Group in Japan manages the progress of safety and health objectives, conducts safety
and health risk assessments at workplaces, takes measures to prevent the recurrence of occupational
accidents, monitors the number of accidents and the results of working environment measurements,
and conducts internal audits and takes corrective action. The progress of these activities is reported
at management review report meetings that all bases participate in. At the end of the fiscal year, areview is held on whether the management system is functioning effectively and to link it to activities
for the next fiscal year as part of the PDCA cycle.

Safety and Health Management Structure

Occupational Safety and Health Principles
1.

We shall strive to eliminate and reduce risks through increasing risk sensitivity and responding to changes forachieving “zero accidents”.

2.

We shall promote measures related to health and promote the maintenance and improvement of both physicaland mental health.

3.

We shall introduce appropriate management resources to ensure the safety and promote the health of Nissha
People, and work to improve their effectiveness.

4.

We shall ensure the safety of Nissha People by having them mutually interact and act with discipline.

5.

We shall construct a management system and promote continuous improvements to suit changes in the business environment.

6.

We shall comply with relevant laws and regulations, act with integrity, and create a safe culture.

Daisuke Inoue
Director of the Board, Senior Executive Vice President, General Affairs
Nissha Co., Ltd.
Established on April 1, 2007 / Revised on May 1, 2022

Nissha Sustainability Report 2022

12-5-1-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment■ Initiatives for FY2021
The Nissha Group in Japan has set safety and health targets inline with our Occupational Safety and Health Policy, and are developing a range of occupational accident prevention activities
with the goal of zero occupational accidents over the three-year
period (FY2021 to FY2023) linked with the 7th Medium-term
Business Plan.

Workplace Risk Reduction - Risk Assessment
We conduct risk assessments to reduce occupational safety andhealth risks in the workplace in accordance with our internal regulations. Risk assessments are conducted regularly on a workplace basis to continuously identify sources of hazards, conduct
risk assessments, and determine and implement risk reduction
measures based on the risk assessments. When an injury accident occurs, a risk assessment is conducted for that work, andrisk reduction measures are taken.
Chemical substance risk assessments are conducted at workplaces that use chemical substances, such as technical development departments and production facilities. In addition toregularly conducting assessments of the risks posed by chemical
substances, we also conduct assessments and review the results,
as necessary, when introducing production processes, work
methods and work environments or new materials or chemicals,
when changing chemicals, etc., or when accidents or disasters
occur.

Safety Patrols
A team led by the safety manager, health manager, industrial
physician, and Nissha Crew Alliance (union) members conducts
safety patrols of workplaces. In addition to checking for potential

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

hazards and unsafe work practices in the workplace, and whether chemical substances are being managed appropriately, thepatrols also try to raise workplace safety awareness by incorporating the perspective of customer requirements.

■ Occurrence of Occupational Accidents
The following table shows the occurrence of occupational accidents in the Nissha Group in Japan. The number of work-related accidents in the fiscal year ended December 2021 was
the same as in the previous year, but both the frequency andseverity worsened due to the increase in accidents resulting indays of leave. As a measure after the fact, we are reviewing work
procedures and providing safety training based on accident casestudies in an effort to correct these issues.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Number of Occupational Accidents by Region (Nissha
Group Major Overseas Production Bases)
The number of occupational accidents at the Nissha Group major overseas production bases in the fiscal year ended December
2021 are given in the table below.
RegionNorth
America

Central andSouth America

Number142

Europe

17

Asia

5

* Work-related accidents requiring absence from work. The count for the number of accidents is based on the standard in each region.

Occurrence of Occupational Accidents (Nissha Groupin Japan)
Item

FY2017FY2018FY2019FY2020

FY2021

Number of occupational accidents
4 or more days of
leave

32

25

13

15

15

5

6

2

3

7

Occupational accident frequency*1(%)

1.45

0.84

0.49

0.98

1.48

Occupational accident severity*2 (%)

0.01

0.01

0.00

0.01

0.05

0

0

0

0

0

Fatal accidents* Figures include accidents involving temporary employees.
*1. Refers to the number of injuries and casualties resulting from occupational accidents (oneor more days of leave) per one million working hours.
*2. Refers to the severity of occupational accidents in terms of the number of working days
lost per one thousand working hours.

12-5-1-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights■ Safety and Health Education and Training

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Safety Slogan
In 2009, we created a safety slogan to raise awareness of safetywith the aim of eradicating occupational accidents. This slogan
is displayed at all of our production bases in Japan and overseas.

We provide education and training
required in workplaces based on
our Safety and Health Educationand Management Regulations.
While some curriculums had to be
postponed again in the fiscal year

Risk assessment training

ended December 2021 due to the novel coronavirus disease(COVID-19), we are focusing on education and training to raisesafety awareness and foster a culture of safety, including implementing remote education and e-learning, as well as preparing
educational videos.

■ External Assessment
The Nissha Group in Japan received the following awards in theTraining Participation
Category

Generaltraining

Safetytraining

fiscal year ended December 2021.
Lesson/Session

Number ofattendees
in FY2021

New employee training (safety and health)18

Special training for handling low-voltage electricity

5

Health training (occupational health and healthhazards)

171

Health training (prevention of heatstroke)

44

Risk assessment training (safety and health)364

Foreman education

36

Chemicals training (risk assessment of chemicals)

82

Safety training (using utility knives safely)

32

Automated external defibrillator training

14

Nissha Sustainability Report 2022

Award target

Award nameAwarding body

Safe Driving Manager,
Nitec Precision andTechnologies Inc.
Kaga Factory

Excellent Safe
Driving Manager

Ishikawa Prefecture
Association of Safe
Driving Managers

12-5-1-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

■ Organizational structure of health and productivity management

12-5-2 Health and Productivity Management■ Health and Productivity Management Policy
Nissha Group sees its mission as to realize the enrichment of people ʼs lives by creating technology and developing it into economic and social value through the diverse capabilities, passion, andleadership of the global Nissha Group. To achieve this, we believe that it is important for each andevery employee to be healthy in mind and body and to be highly motivated in their work, as this will
help the company's performance. This is why we formulated our Health and Productivity Management Policy.

We have appointed a director in charge of health and productivity management as part of ourhealth and productivity management promotion structure. Under the leadership of this director,
the Health and Productivity Management Subcommittee, which is under the umbrella of the Risk
Management and Compliance Committee, drafts and promotes plans for the Groupʼs health measures.

Health and Productivity Management Promotion System

Health and Productivity Management Policy
Nissha Group aims to create new values through our diverse capabilities and passion. We consider the
maintenance and improvement of mental and physical health to allow employees to fully exercise theirabilities to be an important management issue, and promote a range of measures to that end.
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.
Established on September 3, 2018
Revised on July 1, 2021

Nissha Sustainability Report 2022

12-5-2-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Nissha Wellness■ Promotion of Health and Productivity Management

Wellness means leading a healthy “lifestyle”. Leading a healthy“ lifestyle ” requires us to maintain a good balance of nutrientsand calories, activity and rest/sleep, mental state, physical state,work and life, and social interactions. The Nissha Group shares
this concept as Nissha Wellness, with all of our employees, inthe belief that an improved lifestyle quality will lead to greater
creativity and efficiency at work and richer life.

Since our foundation, Nissha has continued to grow whilechanging our own capabilities based on our advanced technological capabilities and identifying changes in the market environment as business opportunities. To that end, we are focusedon the development of human resources based on the idea that
it is important for both the company and our employees to growtogether.

Slogan poster

The Group also believes that how we maintain and improve thephysical and mental health of our employees and how we keepthem motivated to work are important management issues, andwe are implementing the following measures in cooperation
with occupational health staff.

1. Initiatives to raise awareness of measures to combat
passive smoking and quit smoking
Symbol mark• Physical health• Mental health• Teamwork• Work life balance

Nissha Sustainability Report 2022

In the fiscal year ended December
Awareness poster
2021, as part of our effort to get
employees to stop smoking, we
ran a tobacco education program,“Health Effects of Smoking,” thatwas open to all employees of thedomestic Group. 874 employees took part in the program. We
also provided a distance-learning stop-smoking program aspart of our “ Wellness Challenge ”
and we have begun subsidizing
stop-smoking aids. In the fiscal
year ended December 2021, two of the eight participants successfully quit smoking while two more reduced the quantity they

Governance

Third Party Verification / GRI
Standards Content Index / ESG Datasmoke. We will continue these efforts in the fiscal year ending
December 2022.
In addition to the World No Tobacco Day in May, we have established monthly no-smoking days on which we close all smoking
areas at the same time at all our bases in Japan. We will start togradually increase the frequency of non-smoking days from July
2022, and we will permanently close all smoking areas at ourhead office premises from the fiscal year ending December 2024.
Going forward, we will continue our efforts to raise awareness ofthe need to quit smoking, including among employees who do
not smoke, and to raise awareness of the health of our employees
and their families.

2. Boost the rate of important and detailed medical
checkups
We are aiming for a cancer screening uptake rate of 60% or
higher. We are working to improve the rate of employees who
undergo more detailed examinations following their healthcheck-ups by disseminating information on cancer awareness,as this links to the early detection and early treatment of cancer.
In the fiscal year ended December 2021, we held a web-based
seminar, “ Curing Cancer While Working,” which was viewed by
255 employees.

3. Workplace stress check analysis and mental healthsupportWe provide department managers with the results of stresscheck workplace analysis, and teach them the correct way toview and utilize the results to create a comfortable workplace.
Members of the Health and Productivity Management Subcom-

12-5-2-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

mittee (managerial staff from the Human Resources and General Affairs Departments) attend workplace care interviews andencourage department heads to be aware of and follow up on
their concerns from a more managerial perspective.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

4. Wellness Day and initiatives

5. Opened Walking Trail

We have set up a monthly Wellness Day throughout the Nissha
Group. Wellness Days encourage employees to change theirawareness and behavior by promoting a range of initiatives thatwill improve their lifestyle including quitting smoking, offering
nutritionally balanced cafeteria menus, promoting exercise suchas walking, and providing information on diet and sleep, etc.

We have established a walking trail on our head office premisesthat is approximately 600m per lap. In the future, we will createa plan to encourage employees to use the trail and have fun
exercising, thus helping to make up for their lack of exercise andimprove their physical fitness.

We will continue to use Wellness Day to implement health initiatives for employees including preventing the onset of lifestylediseases.

As a mental health support, we carry our mental health education (self-care, line care, etc.) by clinical psychologists every
year. In the fiscal year ended December 2021, we held a web
seminar, “2021 Mind and Body Wellness Seminar” (explanationof the significance of and how to nurture EQ (Emotional Intelligence) by a clinical psychologist and core training by a healthand exercise instructor), which was seen by 108 employees.

Steamed chicken and greens with vitamin
ACE dressing

Take the stairs whenever possible!

Walking Trail

We plan to hold line care training in the fiscal year ending December 2022.
Avoid checking your phone before bed!

Nissha Sustainability Report 2022

12-5-2-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Fair Operating
Practices

Human Resources

Quality Management / Efficiency
and Productivity Improvement

6. Specific health guidance■ Key data for the past 5 years (Nissha Group in Japan)

We provide specific health guidance as a high-risk approach.

We are using a variety of data to monitor, maintain and improve
the health of our employees.
Unit: %

7. Support for balancing work and treatment

FY2017FY2018FY2019FY2020

FY2021In the fiscal year ended December 2020, we revised the Leaveof Absence Regulations to introduce rehabilitative work. We will
support our employees so as to ensure their health and allow
them to balance treatment and work without aggravating theirillness. Refer to 12-4-6 Support for Reinstatement after Longterm Leave

Regularhealth checkup rate

100.0

100.0

100.0

98.8

99.7

Detailed checkup rate after
regular healthcheckup

49.8

42.6

37.8

34.7

51.7

Specific
health checkup rate

100.0

100.0

100.0

99.8

99.7

8. Remote counseling

Lung cancer
screening rate

99.1

92.0

98.7

99.4

100.0

We have set up an external 24-hour health consultation service,so that employees can have easy access to mental health counseling by professional counselors. The service can be accessed
via phone or the internet even when pressed for time due towork commitments. Privacy is also assured. A certain number of
employees use the service each year.

Stomach cancer screening
rate

93.2

83.3

99.3

92.4

94.0

Colorectal cancer
screening rate

93.8

87.9

95.6

96.8

96.8

Uterus cancer
screening rate

46.7

47.9

49.4

60.3

66.7

Breast cancer
screening rate

60.6

61.5

―

81.1

74.2

Stress check
implementation rate

99.9

100.0

100.0

100.0

100.0

Specific
health guidance implementation
rate

87.0

92.6

97.0

96.2

99.0

Smoking rate*

34.2

30.7

29.3

27.8

28.5

Obesity rate*

22.2

24.2

24.1

23.7

29.7

Governance

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■ Acquired "Health and Productivity Management

Outstanding Organizations (White 500)" Certification
We have been certified as a White 500 company in the large
enterprise category of the Health and Productivity Management
Organization Program by the Ministry of Economy, Trade andIndustry. This certification recognizes our Health and Productivity Management initiatives, which consider employee healthmanagement from a managerial perspective to strategically
implement activities that maintain and promote health. In the
future, we will continue to promote maintaining and improving
mental and physical health to allow employees to fully exercise
their abilities.

*Excluding Kaga Factory and Tokyo Division Headquarters until the fiscal year ended December 2020

Nissha Sustainability Report 2022

12-5-2-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

13. Initiatives Related to Information Security
13-1 Policy and Principles

13-2 Management Structure

The Nissha Group has created, and continues to operate, an Information Security Management System(ISMS) based in the ISO27001 that is applied to all group companies, and that reflects our Information
Security Policy and our principles outlining specific conduct and regulations known as the Information
Security Principles. We prevent threat to the important information received from our customers andsuppliers and important information managed under tight control within the company, particularly highly confidential information assets such as new product information, advanced technological information,and personal information.

As an organization to promote information security within the Nissha Group, the Information Security
Subcommittee was established under the Risk Management and Compliance Committee, and works on
maintaining and improving the ISMS.

Information Security Policy
Nissha Group constructs a reliable and safe information security management system (ISMS) based on an understanding of the importance of information security in business activities and continually improve this in order tocontinue to be a company that provides economic and social value to our stakeholders.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Under the CIO (Chief Information Officer), the head of the Information Security Subcommittee is the
ISMS management representative, and the ISMS secretariat has been established in the IT department
to oversee all IT environments in the Group. The ISMS covers all bases within the Group, including thoseoverseas. For each affiliated company and department, an information security manager and an information security promoter are appointed, and ensures the system operates in each workplace. In addition,
the ISMS secretariat plays a central role in conducting reviews for top management, internal audits of theISMS, and regular ISO27001 audits by external examiners to provide opportunities for improvement.

Management Structure

Information Security Principles
1.

We shall continually improve our information security management system by establishing, implementing,and reviewing the information security objectives so that the confidentiality, integrity, and availability of information assets can be maintained and improved.

2.

We shall comply with laws, regulations, and contract stipulations related to information security.

3.

We shall establish criteria for rationally evaluating risks related to information security and methods for risk
assessment, and work to maintain and improve information security.

4.

We shall work to prevent the occurrence of incidents or accidents related to information security, and, if an
accident does occur, shall respond promptly and work to both minimize damage and prevent recurrence.

5.

Nissha People shall understand the Information Security Policy and Basic Principles, and always act with anawareness of information security.
Yoshitami Aoyama
Senior Vice President, Chief Information Officer
Nissha Co., Ltd.
Established on July 1, 2013 / Revised on May 1, 2022

Nissha Sustainability Report 202213-1

Contents /Editorial Policy

Domestic

Overseas

13-3

253
employees

46
employees

Nissha Group
Sustainability

Environment

Information Security Managers

84 employees

Information Security Promoters

169 employees

Information Security Managers

15 employees

Information Security Promoters

31 employees

Deployment of the Management System

The Nissha Group operates the ISMS at all its bases, both in Japan and overseas.
In Japan, we have obtained ISO27001 certification, the international standard for ISMS. Overseas, we have been rolling out
ISMS as a unified standard globally, including for corporations
that have newly joined our Group as a result of M&A and so on.
This rollout was completed in the fiscal year ended December
2019. At present, in addition to an annual ISMS internal audit, we are working to maintain and improve ISMS operations
through the PDCA cycle.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

13-4 Efforts for Risk Reduction
The Nissha Group maintains an Information System (confidential information, personal information, information security) as
one risk area managed under the Risk Management and Compliance Committee. In the fiscal year ended December 2020,
we worked on appropriate management of trade secrets andoperation. In the fiscal year ended December 2021, we permeated this operation, performed internal auditing of the implementation status, and promoted expansion abroad. Information
assets are important information that differentiates us from ourcompetitors and increases our competitiveness, so it is essential
to reduce risks such as information leaks. Through ISMS internal
audits, we advance the permeation of control methods corresponding to the level of importance, and particularly implement
thorough and strict control concerning trade secrets.
In addition, with the rapid progress of IT and the diversificationand spread of devices, we are working on measures to reduce
the risk of our corporate image and brand being affected orinformation leaks through social media postings. We are also
working on information security measures for personal information devices as used for BYOD (Bring Your Own Device), in addition to company-supplied computers and terminals.

Responses to the COVID-19
The Nissha Group has introduced IT services to support thediverse working styles of our employees. These services automate or streamline operations, or make them paperless.
We also completed conversion of our IT infrastructure to thecloud in 2019. In response to the Information security risk,

Nissha Sustainability Report 2022

Governance

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Standards Content Index / ESG Data

we are constructing a system that allows almost all IT services
provided by our companies to be safely accessed from out side. By creating an environment where employees can work
anytime, anywhere, we were able to smoothly transition to
telework to prevent the spread of COVID-19, achieving seamless business continuity. In 2021, we engaged in the further
strengthening of security in telework environments. Introduction within Japan is already completed, and currently we arefocused on expansion abroad.

13-5 Training
Cyber attacks are becoming increasingly sophisticated day byday, so merely strengthening systems will not prevent all ofthem. To prevent damage, it is essential for each and every
employee to be fully aware of information security and act withdiscipline so that they can learn about threats and methods, andrecognize issues as soon as possible.
The Group holds training sessions for all employees, using
e-Learning, based on training materials that reflect our internal information security policies determined in-company. The
fiscal year ended December 2021 training attendance rate was
98.1%. To further increase control and awareness level in theworkplace, we will also focus on education for security managers
at each workplace moving forward.

13-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

14. Initiatives Related to Intellectual Property
14-1 Views on Intellectual Property

14-2 Major Initiatives

The use of intellectual property is essential for the Nissha Group
to appropriately protect and provide customers with products
obtained as a result of our R&D and business activities. In order to contribute to our business performance and to securing
a competitive edge for new businesses, the Group emphasizes
the three areas of “risk management,” “rights acquisition,” and“ training, ” under the leadership of the Intellectual Property
Management.

■ Risk management■ Training

To prevent inadvertent use of the intellectual property of othercompanies or the unauthorized use of our intellectual property
by third parties, we have established a SDI (Selective Dissemination of Information) system that constantly monitors whether
these intellectual properties are being used appropriately.

Training employees is important for promoting intellectual property initiatives. To that end, the Group is enhancing its various
training programs so that each and every employee can understand and implement intellectual property right acquisition andusage.

■ Rights acquisition
We use the intellectual property system to properly safeguard
the results of our research and development. Rights acquisition
is not limited to patents, but covers a wide range of other rights,
including designs, trademarks, and copyrights. In addition, as
the Groupʼs products are sold globally, we are working to obtainrights in other countries as well as Japan. The Intellectual Property department comprehensively manages from application torights expiration, and intellectual property rights we have obtained are utilized strategically throughout the Group.

Nissha Sustainability Report 2022

We offer a wide range of training for all employees taught by Intellectual Property department staff, from fundamental curriculum such as explanations on how to read patent publications
and the process of patent acquisition to on-the-job curriculum
such as techniques for surveying patents from other companies
and duty related points to consider regarding intellectual property. In the fiscal year ended December 2021, a total of 141
employees attended.
In mandatory training for employees in engineering fields, we
invite outside experts to learn how to grasp and brush up on inventions, steps in determining infringements, and so on. These
trainings are designed to continuously improve employeesʼ skills
and knowledge regarding intellectual property. In the fiscal year
ended December 2021, a total of 33 employees took the basic
and advanced courses.

14

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

15. Trade Management
The Nissha Groupʼs ratio of overseas sales is 88.1% in the fiscal year ended December 2021. As
the Groupʼs businesses expand globally, disciplined trade management is an essential issue fromthe perspective of business continuity.

15-1 Management Policy and Management Principles
Targeting all group companies, we maintain "Trade Management Policy" and "Trade Management
Principles” outlining specific conduct, compulsory conduct, and regulations. As an Authorized Economic Operator (AEO), we also establish rules and regulations, and maintain a structure toward
continuous improvement of trade management.

Trade Management Policy

15-2 Structure
Starting in the fiscal year ending December 2022, Nissha Group trade management is now consolidated in the Trade Management Subcommittee under the Risk Management and Compliance
Committee. Across the entire Nissha Group, including overseas affiliates, we select trade management supervisors and engage in trade management based on the Trade Management Policy, Trade
Management Principles, and Trade Management Basic Regulations.
At Nissha Group in Japan, we place Trade Management Subcommittee members (responsible persons, directors, and members) in business divisions, corporate management departments, and affiliated companies to create a management system. At the same time, since overseas Nissha Group
companies have different laws, regulations, and business practices in each country or region, we
assign a trade control manager to each base to manage.

Nissha Group fulfills its responsibilities as a company to its stakeholders by developing a trade management system and complying with laws and regulations related to trade management, such as security
export control.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

Trade Management Principles
1.

We comply with laws and regulations related to trade management in each country and region.

2.

We shall appoint a person responsible for trade management in our bases, and in addition to developing the trade management system, this system shall be maintained and improved.

3.

We shall cooperate with public agencies and logistics partners in each country to establish asound trade management system.

4.

Nissha People will undergo any training required for trade management, and each person shallcarry out their work appropriately.
Yoshitami Aoyama
Senior Vice President, Chief Supply Chain Officer
Nissha Co., Ltd.

Established on October 1, 2016 / Revised on May 1, 2022

Nissha Sustainability Report 2022

At Nissha Group in Japan, a range of operational regulations and rules for trade-related operations
required of AEO businesses have been established, while each department is preparing work standards
and manuals to ensure export and import operations are carried out appropriately. At Nissha Groupbases overseas, we are working on disseminating the Trade Management Policy, Trade Management
Principles, and Trade Management Basic Regulations as well as preparing management documents.

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

15-3 AEO Approval
Authorized Economic Operator (AEO) Program
Nissha Co., Ltd. obtained approval as an AEO Exporter in June
2014, and as an AEO Importer in June 2015. Their second
post-audits were conducted in October 2019, and we maintain
all approvals. As of January 4, 2022, 60 companies in Japan areapproved as both AEO Importer and AEO Exporter. Being one ofthese companies with dual approval, we have in place a system
for safe and smooth international logistics.
Nissha Precision Technologies Malaysia Sdn. Bhd., based in Malaysia, obtained approval as both an AEO Exporter and an AEO
Importer in October 2014, and maintains both approvals.

AEO Approval Form

The AEO program is designed to secure and facilitate global
trade and to strengthen a countryʼs international competitiveness by providing benefits such as reduced or simplified
customs controls to operators with cargo security man agement and compliance structures. The September 11,
2001, terrorist attacks on the United States raised awareness of the necessity of an international framework for reinforcing anti-terrorism measures by ensuring both security
and efficiency in the international movement of goods. In
2006, the World Customs Organization (WCO) adopted
a set of AEO guidelines as a global standard and the basis
on which countries enact laws and operate their respective
AEO programs. Japan launched its AEO program in 2006,
starting with exporters and expanding gradually into thecurrent form.

15-4 Initiatives for FY2021.12
In the fiscal year ended December 2021, we set proper and lawful operations during importing and exporting as one strategy
item for promotion of compliance, which we have identified as amateriality. And following from the previous year, we are engaging in the following two items as KPI (Key Performance Indicators).

Nissha Sustainability Report 2022

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

• Zero incidents of illegal/unlawful declarations: In the fiscal
year ended December 2021, there were 7 incidents. In order to confirm the effectiveness of prevention measures forworkplaces that caused incidents, we established and operated a flow to reconfirm whether the prevention measures
are functioning effectively within 6 months after the incident, and thoroughly prevent recurrence.
• Zero omitted declarations of charge factors: Thanks to reinforcing management by creating a system of followup checking within the company established on 2020, there was no
incident occurred in the fiscal year ended December 2021.

15-5 Training
Starting in the fiscal year ended December 2020, we provide
theme-based education oriented towards employees involved in
actual importing and exporting. In the fiscal year ended December 2021, we carried out training for 119 employees actually
involved in trade operations in Japan, regardless of their department.

■ Themes• Security trade controls• Determining relevance and screening transactions• Incoterms and HS codes• Internal import/export steps

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

16. Partnership with Our Suppliers
16-1 Basic Policy
The Nissha Group procures the raw materials, components, equipment, and services necessary formaking our products from suppliers in various regions. We work fairly and equally with all suppliers
to promote CSR procurement based on our Purchasing Principles in order to share awareness of oursocial responsibility and enhance mutual corporate value.
Our Purchasing Principles cover all business operations throughout the Nissha Group. Based inthese principles and the Purchasing Management Regulations as a management framework outline, we implement frameworks for each type of business.

We request all of our suppliers to comply with the Purchasing Principles and the CSR Procurement
Guidelines. These Guidelines are based on the Responsible Business Alliance (RBA), a code of conduct for the electronics and automotive industries, and on other codes of conduct that our customers request we follow. The items are listed below.

■ Items of CSR Procurement Guidelines and SAQ (Self Assessment Questionnaire）
1. Labor and human rights

2．Health and safety

3．The environment(1) Elimination of Involuntary Labor(1) Occupational safety and health(1) Environmental permits and re-(2) Prohibition of child labor, pro-(2) Emergency preparedness

tection of young workers andPurchasing Principles
Nissha Group achieves sustainable procurement by building relationships of trust with our suppliers
through mutually fair purchasing.
Nissha Group evaluates our suppliers in terms of fairness, impartiality, and comprehensively based on thefollowing criteria.
1.
Stable business foundation and reliable management principles
2.
Excellent technology development and the abilities to propose products or services that consider
environmental impacts
3.
Provision of stable, high-quality products or services
4.
Price competitiveness5.
Stable production capacity and lead times
6.
Effective business continuity management plans
Nissha Group achieves sustainable procurement by working with our suppliers in the following areas.
1.
Labor and human rights
2.
Health and safety
3.
Environment
4.
Ethics5.
Information security

Yoshitami Aoyama
Senior Vice President, Chief Supply Chain Officer
Nissha Co., Ltd.

(3) Prevention of occupational injury

porting(2) Pollution prevention and re-and illness

source reduction(3) Working hours(4) Industrial hygiene(3) Hazardous substances(4) Wages and benefits(5) Physically demanding work(4) Solid waste(5) Humane treatment(6) Machine safeguarding(5) Air emissions(6) Non-discrimination(7) Sanitation, food, and housing(6) Materials restrictions(7) Freedom of association(8) Health and safety communica-(7) Water management

student workerstion(8) Energy consumption and greenhouse gas emissions

4．Ethics

5．Information Security(1) Business integrity(1) Building of information management system(2) No improper advantage(2) Defense against threats on computers and networks(3) Disclosure of information(3) Management and protection of personal information(4) Intellectual property

and confidential information(5) Fair business, advertising and competition(6) Protection of identity and non-retaliation(7) Responsible sourcing of minerals* These guidelines are implemented mainly in our Devices Business.

Established on April 2, 2009 / Revised on May 1, 2022

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Nissha Group
Sustainability

Environment

16-2 Maintaining Purchasing Related Rules
In 2021, the Nissha Group implemented a comprehensive revision of our "Purchasing Management Regulations". The majorrevision matters were the following four points.

1. Scope expansion

Expanded the scope to overseas, which waspreviously covered only in Japan.

2. Purchased items
expansion

Expanded the scope of conventional production materials to all purchased products
and services.

3. Code of Behavior

The conventional "purchasing knowledge"
has been formulated as a "code of behavior", and the content has been clarified.

4. Purchase frommultiple suppliers

Set purchasing from multiple suppliers(multi-sourcing) the basic principle, thatwas not specified previously.

This revision clarified the roles (responsibilities) and authority of the procurement and sourcing division and added rules
to ensure the actualization of fair, equitable, and transparent
transactions. Specifically, the revisions clarify the visualizationof group-wide purchasing activities, compliance with laws suchas the Subcontract Act, and monitoring systems as related tointernal control. Furthermore, in addition to the procurement
and sourcing division, the revisions incorporated the roles ofother divisions that have potential points of contact with suppliers, such as a technology division and a manufacturing division.
They also specify the Nissha Group's purchasing activity stanceand clarify requests towards suppliers. We also plan to review

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

and revise lower level documents such as the various purchasing
related rules and guidelines.
In September 2020, we established and announced our Declaration of Partnership Building as promoted by government
agencies such as the Cabinet Office, and are promoting activities
designed to build trust relationships with all of our suppliers andenhance mutual enterprise value.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

16-4 CSR Audit and SAQ
At Nissha Group production bases, we conduct customer-based
CSR auditing. Among these audits, some items require passing
scores as preconditions for mass production orders, some incorporate periodic monitoring, some employ on-site auditing,some use remote auditing, and some have auditing conducted
via a web-platform.
In the fiscal year ended December 2021, audits were conducted
for the Kyoto Global Headquarters, the Nitec Industries, Inc. (NII)
Koka Factory, which is the Industrial Materials business production base, the Nitec Precision and Technologies (NPT) Himeji
and Kaga Factories, which serve the Devices Business, and outside contractors including materials procurement sources. These
audits found that no serious claims existed, including significant
human rights violations or environmental law infractions.

16-3 Nissha Group Supply Chain
We at the Nissha Group collaborate with various suppliers
through our business activities, and our supply chain is expanding globally.

Main Entities of the Nissha Group Supply Chain

In addition to undergoing these customer-based audits, we havebeen promoting CSR auditing targeting particularly importantand new suppliers from the fiscal year ended March 2015 onward as part of an effort to maintain a safe and secure supply
chain. The total audits to-date are 19 companies with a total of
187 improvement comments (88 related to labor and humanrights, 53 to safety and health, 29 to the environment, 12 toethics, and 5 to management systems).
In addition to on-site auditing, we also implement annual surveys using our own Self Assessed Questionnaires (SAQ) to gauge
the status of supplier CSR activities. Recently we have been paying particular attention to human rights risks at our production
bases and enhancing our auditing of suppliers, including staffing
agencies. Particularly at NPT, a major Nissha Group production

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Sustainability

Environment

base, we are implementing surveys targeting our new partners
as well as our regular business partners centering mainly aroundstaffing agencies.
At the request of our customers, in the fiscal year ended December 2021 we conducted a SAQ survey of 40 companies (frommaterials suppliers to assembly contractors) in Europe and Asia,
including China, in addition to Japan. As a result of the survey,
no particular points of concern were found. We will continue to
conduct these surveys, and if any concerns are identified in the
responses, Nissha employees qualified as internal auditors willvisit suppliers and conduct on-site audits in accordance with theprocedures.
The CSR auditing and Self Assessed Questionnaires (SAQ) arebased in our CSR Procurement Guidelines (16-1).

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

16-5 Development of Procurement Personnel

Since 2008, the Nissha Group in Japan has been continuously providing training to develop procurement personnel (basic
procurement education, training for technical and development
departments, procurement training by external instructors,etc.). To date, a total of more than 1,000 people have taken thistraining.
In the fiscal year ended December 2021, we offered basic procurement education designed individually for the procurement
and sourcing division and technology development, and 218
employees attended. The basic procurement education designed
for the procurement and sourcing division targets procurement
and sourcing employees new to purchasing related tasks andaims to embed knowledge necessary for their work and enhancecompliance awareness. The basic procurement education designed for technology development targets technology related
employees. Mainly for employees who have not already undergone procurement education in the past, it aims to embed basic
procurement knowledge such as company procurement rules,
including basic knowledge for laws and contracts related to procurement and the Purchasing Principles.
In future, we plan to expand the scope of this education to include mid-level employees and managerial staff, as a way toprovide systematic procurement education.

Nissha Sustainability Report 2022

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

17. Quality Management, Efficiency and Productivity Improvement
17-1 Quality Management
17-1-1 Quality Policy / Nissha Quality Way
In April 2022, along with a revision of our Quality Policy, we established the Nissha Quality Way as acode and standard of conduct necessary to actualize the Quality Policy. These are our fundamental
philosophies for quality in the Nissha Group and upper level policies for all quality policies currently
implemented in the Quality Management System (QMS).
These philosophies are spread and percolated through the Nissha Group in an array of opportunities
including training by Chief Quality and Production Officer (CQPO) at overseas bases, training targeting new employees and promoted employees, and inclusion in corporate magazines (published inJapanese, English, and Chinese).

Quality Policy
Nissha Groupʼs products and services enhance value for customers and society through the establishment
and operation of quality management system that is designed to ensure quality, cost, robust supply chains,and compliance with relevant laws and regulations.
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Nissha Quality Way
1. CUSTOMER FOCUS
We continuously achieve customer-defined quality.
2. LEADERSHIP
We are all committed to upholding and executing our Quality Policy – each and every one of us is a leader.
3. PROCESS APPROACH
We work based on systematic approach and continue to improve.
4. QUALITY BY DESIGN
We build quality into design, focusing on product safety and feasibility.
5. VALIDATED DECISION MAKING
We are established in evidence-based and scientific approach.
6. QUALITY BY CONNECTED SUPPLY CHAIN
Quality is at the core of our trusting relationship within our supply chain.
7. BAD NEWS FIRSTWe quickly address challenges through rapid response and escalation process.
Yutaka Nishimoto
Director of the Board
Executive Vice President, Chief Quality and Production Officer
Nissha Co., Ltd.
Established on June 1, 1997 / Revised on April 1, 2022

Nissha Sustainability Report 2022

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

17-1-2 Quality Slogan

17-1-3 Quality Management System (QMS)

For the quality improvement, it is essential to take actions witha strong awareness of customers. Across the entire the Nissha
Group, every single employee is required to be responsible for
their daily work and to constantly improve quality. To actualize
that, it is necessary for each employee to work with “passion” andto consolidate the “wisdom” and ingenuity” of all employees.

Out of our belief that the systematization of work is important,
the Nissha Group constructs our quality management systems
to align with their target markets. We also create quality targets
that conform with quality policies as well as planning to meetthose targets. This is employed in the process of cycling through
PDCA and in our quest to actualize target performance.

Following our Quality Policy revision and the establishment of the
Nissha Quality Way, we revised our quality slogan in April 2022.
The slogan shows that the protagonist who creates quality is"me", that is, all employees working in our group. Just as in our
Quality Policy and the Nissha Quality Way, we are spreading andpermeating this slogan throughout all Nissha Group companies
both in and outside Japan.

In addition to creating, implementing, and continually improving quality control systems based in the international ISO 9001
(2015 version), we are steadily constructing quality assurance
systems individually aligned with medical, mobility, and sustainable materials designated as the priority markets in our Sustainability Vision (long-term vision) for where we want to be in 2030.

“Quality”

Quality by Everyone, Everyday,with Passion
私は品質に責任を持つ
一人ひとりが情熱を持ち、全員参加で、品質を継続的に改善しよう！

Nissha Sustainability Report 2022

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

In businesses targeting the medical market, we are acquiring operating permits required to manufacture and sell medical devices
within Japan. Additionally, we are pursuing the upgrading of oursecond-class marketing license for medical devices to a first-classranking. Affiliated companies Nissha FIS, Inc. and Nitec Precision and Technologies, Inc. as well have both acquired operating
permits to manufacture medical devices. Moreover, eight basesof the Nissha Group in North/Central America and Europe haveobtained ISO13485 certification, the international standard for
quality management systems in the medical devices industry.
Our Global Headquarters in Kyoto obtained the same certification in October 2019.
In businesses targeting the mobility market, Nitec Precision andTechnologies, Inc. Himeji Factory (including the Kyoto Site),
which manufactures touch sensor modules, and multiple otherbases have obtained IATF16949 certification for quality management systems in the automotive industry.

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

17-1-4 Quality Creation at the Design Stage

17-1-5 Overall Optimization and Continuous Improvement

The Nissha Group has constantly evolved our quality assurance competency. Usually, 80% of thequality and cost are determined by the design stage, and improvement after advancement into thequantity production stage is believed to have a limited effect. In the current 7th Medium-term Business Plan (FY2021.12 – FY2023.12), the target is expanded from quality improvement at production sites to build quality at the design stage.

The Nissha Group sees linkages between departments and between company functions as process
linkages. We promote to clearly define "inputs" and "outputs". We are aiming for overall optimization by
being aware of process connections and thoroughly implementing the importance of division of roles
within the company, and by having all employees stand from the customer's perspective. We believethat basic concepts like this and the sorting out of functions will build the foundation as a manufacturing company.

Furthermore, because changes in the 4Ms* after advancing to quantity production generates changes in quality stability, the following is required at the stage of advancing to quantity production (atdesign completion).
1. Product design and material design: Ensuring product specification satisfaction and product safety
2. Production process design: Realization of high productivity and stable quality"QUALITY BY DESIGN" in the Nissha Quality Way clearly calls for creating quality that values productsafety and feasibility at the design stage, and promotes the completion of necessary designing andverification before advancing to quantity production.
*4M: materials, manpower (capacity required for business), machinery (facilities, equipment, production environment, measuring instruments, etc.), and methods (production methods, production control methods, examination methods / standards, etc.)

The accumulation of bits of insight and ingenuity from all employees is the source of great improvements in work processes. This approach forms the foundation of Nissha Groupʼs “small-group activities” and “improvement proposal system”. We believe these are extremely important as a manufacturing company, and we are deepening these activities across the entire Nissha Group. Moreover, basedon the idea that the quality of people plus the quality of work equals the quality of the company, andemployees are our most important management resource, we are actively engaging in the development of human resources, such as through the continuous planning and implementation of a rangeof education. Through these activities, we are implanting the concepts of (1) always interweaving ingenuity into your work, (2) judging based on data (facts), and (3) using the PDCA Cycle (Plan, Do, Check,Act) to continuously improve, so that we can further improve our customersʼ satisfaction. As specified
in the “VALIDATED DECISION MAKING” in the Nissha Quality Way, we are constantly pursuing improvement from a fact based, scientific approach.
Training

Practical education① General quality training (for new employees, promoted① Support for small-group activities

②
③
④
⑤

⑥

Nissha Sustainability Report 2022

employees, new managerial staff, managers, and overseas assignees)
Priority markets skill training
Management system training (ISO9001, IATF16949,
core tools, internal quality auditor)
Quality control training (QC Exam levels 3 and 4, QC
Seven Tools, New QC Seven Tools, basic statistics)
Quality methodology training (statistical methods,
experimental design, Taguchi methods, reliability engineering, etc.)
Digital Transformation training (AI, statistical processing,
Python, etc.）② Support for Digital Transformation activities

Information sharing① Company-wide Presentation Meeting of Small-group Activities② Presentation Meeting of Digital Transformation ac-

tivities③ Operate the improvement database to inform all

Nissha Group employees on improvement content
including small-group activity, improvement proposals, Digital Transformation activity, and automatization examples

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Sustainability

Environment

17-1-6 Quality and Safety of Products
Information on product handling and safety is clearly stated in
the delivery specifications, etc. to customers. In the unlikely eventthat an incident involving a defect in our products or services
leads to a violation of laws and regulations or a serious accident
related to quality assurance, we will establish a CPL* Committee
to quickly resolve the situation. In addition to providing the appropriate reports to government agencies in accordance with thelaw, we have a system in place to inform our customers of any
necessary information as soon as possible. Employees are madeaware of the importance of ensuring product quality and safety
through corporate ethics and compliance training and otherprograms. As stated in "BAD NEWS FIRST" in the Nissha Quality
Way, we think that when a problem occurs, prompt escalationand early response is an opportunity to strengthen trust from allof our stakeholders, including customers.
The evaluation of our product quality is determined by ourcustomers. The Nissha Group indexes and manages quality
performance with factors including quality defects and delivery
disappointments communicated by customers as a "customer
satisfaction level" index.
In the fiscal year ended December 2021, there were no CPL
Committee meetings, no violations, and no CPL incidents (nofines). We will continue striving to maintain the number of violations and CPL cases at zero.
*Combination of contractual liability (CL) with product liability (PL)

Human Rights

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

17-2 Efficiency and Productivity

nology such as IoT and AI and using it in quality control, production, and sales activities, and automatizing, reducing personnel,
and streamlining work especially in routine tasks.

The Nissha Group includes the improvement of efficiency andproductivity as a materiality. We are advancing our digital transformation under the philosophy that, in addition to improving
company efficiency and productivity, digital technology also links
to improving added value provided to the customer and resolving
societal issues.

17-2-1 Initiatives through FY2021.12

Improvement

We are promoting digital transformation in a phased approachin the following three steps, and engaging in improving an environment and cultivating a human resource base to support thattransformation.
Furthermore, we are engaged in cultivating human resources toadapt to the changing business environment, developing IT tech-

The Nissha Group is also working to improve productivity in
manufacturing. This involves making IoT and AI integral parts ofproduction bases, and is mainly being done through "Smart QC,"
a project that aims to improve quality and productivity throughIT, and "Smart Factory" that promote robotization and labor-saving in production processes. In addition to the digitalization of
production, by engaging in the streamlining of design work underthe banner of design digitalization, we are advancing efforts toembed quality at upstream stages.
In the fiscal year ended December 2021, as part of our design

Contents

STEP1

STEP2

STEP3

Nissha Sustainability Report 2022

Human Resources

Examples of initiatives

Improve productivity of internal operations bycreating and digitizing databases (DB) for specificdepartments and operations. Resources securedby this will be reallocated to high value-added
businesses.

• Effective use of data through DB construction

Extend digitization to the entire value chain
to increase the added value we provide to ourcustomers.

• Using AI in the quotation process

Create new business models that help solve
social issues through digitization.

• Automation of production, design, and indirect operations through the use of AI
and RPA• Sales Force Automation (SFA) and marketing tools to improve the efficiency ofsales activities• Creating customer value (QCDS) through the use of AI in business operations• Building digital platforms• External sales of in-house systems and expertise• Establishment of a data business and business collaboration (ecosystem) using
accumulated data

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Nissha Group
Sustainability

Environment

digitalization initiative, we began ramping up efforts to digitalize
the design workflow and construct frameworks to gather andutilize design data. Through the digitalization of design workflow, we are proceeding with the streamlining of work and data
consolidation. And using consolidated data, we constructed the
AI-powered automatic yield rate projection system and automatic delivery date projection system. Moving forward, we are
increasing data quantity and enhancing forecast accuracy, andworking towards the ability to elicit optimal design conducted
through computer simulation alone in the development stage.
Furthermore, concerning AI and digital transformation related
education, we held basic lectures mainly in a classroom format
that aim to engender AI and digital transformation comprehension and advanced simulation courses that allow participants toexperience the AI project flow from theme selection to POC (Proofof Concept) planning and expense estimating. Additionally, as amethod of productivity improvement in deskwork arenas for thevarious different business areas, we introduced features including
RPA (Robotic Process Automation), an electronic internal memo
system, and AI-powered chatbot functionality. We also expanded
work automatization and streamlining effects through enlarging the scope of system application by interweaving multiple
systems so as to transcend the discrete effects gained by using
each individual system alone. In the fiscal year ended December
2021, deployment both in and outside Japan advanced. And,
from full scale implementation in 2019 to the end of 2021, an
approximate cumulative total of 97,000 hours of work time wasstreamlined and automatized.

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

17-2-2 Initiatives for FY2022.12 and beyond
From the fiscal year ending December 2022 onward, as one inroad into the digitalization of the value creation process, we willcontinue to engage in systemization, including indirectly workand pursue digitalization for work efficiency.
As an approach towards digital transformation aimed at actualizing new business models, we will endeavor towards the improvement of consolidated data usage and promote digital twin framework creation. By visually expressing and simulating a variety ofobjects and processes in the digital world, we aim to construct asystem that can optimize design, production, stock management
and assess changes in profit and loss in a timely manner.
With the above in mind, the Nissha Group will continue to globally expand, for both relevant work tasks and utilizing divisions,workflow automatization and streamlining that employs productivity improvement tools focusing on RPA as a way of improving
efficiency and productivity throughout all companies.
Furthermore, we will continue to engage in the digitalization andstreamlining of workflow for each function, including marketing,sales business, research and development, and logistics.
And aiming to cultivate human resources that can independently
create programs and apply them to workflow, we continue promoting practical education focusing mainly on hands-on experience learning opportunities.

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

18. Corporate Governance
18-1

Basic Approach to Corporate GovernanceNissha, since its foundation, has been executing strategies that promptly address external challenges, under committed leadership. The Company believes that strengthening corporate governancealong with such leadership will promote agile and decisive decision making, as well as ensuring management transparency and fairness.

18-2 Overview of Corporate Governance
We have established a corporate governance structure as shown in the figure below (as of June 1,2022).

Based on this recognition, the Company places corporate governance as one of the key management issues, strives to maintain and improve it, and seek out sustainable corporate growth and anincrease in corporate value over the medium- to long-term. In an effort to clarify the Nissha Groupʼsbasic approach to and policy for implementing corporate governance, in October 2015 we established a Corporate Governance Policy.
* For further information, please follow the link below.
About ＞ Corporate GovernanceCorporate Governance Policy（PDF）

Nissha Sustainability Report 2022

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Nissha Group
Sustainability

Environment

We make major business judgments and oversees the executionof the duties of the Directors of the Board at meetings of theBoard of Directors, and as a company with an Audit and Supervisory Board, will strive to maintain and improve the oversight andchecking functions by Audit and Supervisory Board Members andan Audit and Supervisory Board which are independent from theBoard of Directors. We adopt a corporate officer system in aneffort to clarify the powers and authority in the speedy decision
making and the implementation of decisions, under which theBoard of Directors will be in charge of the formulation of strategies and business oversight, and the Corporate Officers will be incharge of the execution of business.
The President chairs the following meetings toward appropriate and efficient business execution.
Management Meetings
Comprises Inside Directors of the Board as core members. Deliberates on matters relating to the direction of important managerial issues within the scope of the Presidentʼs authority.
Investment Committee
Ensures discipline in investment decisions by discussing thestrategic rationale for investments and the appropriateness ofinvestment recovery plans prior to submitting particularly important investment matters to the Board of Directors, and bymonitoring investments after they are made.
Business Review
Monthly and quarterly meetings to review the progress of business strategies based on key performance indicators (KPI) anddetermines actions to take over the short term. The purpose of
the MBR is to monitor business execution by Corporate Officers
and quickly respond to changes in the business environment.
We also have in place the following organizations in order to en-

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

hance the management monitoring function, ensure that business execution complies with laws and regulations as well as our
Articles of Incorporation, and to manage risks.
Sustainability Committee
Chaired by the president and CEO and vice-chaired by the
Director of the Board, Executive Vice President in charge ofsustainability. Based on the Sustainability Vision, the Sustainability Committee is comprised of the ESG task force, businessorganizations, and departments related to the various themesof corporate governance and risks that hamper business continuity as well as business opportunities and management
infrastructure for the long-term continuance and growth of
the Nissha Group. The ESG task force is established on themes
considered to be particularly important from the aspects of theenvironment, society, and corporate governance, and plays arole in accelerating activities in each of these at Nissha.
Risk Management and Compliance Committee
This committee is chaired by the Director of the Board, Senior
Executive Vice President, Legal Affairs, with the Senior Vice
President, Chief Supply Chain Officer as deputy chair. The Risk
Management and Compliance Committee comprehensively
grasps risks that could hamper the Nissha Groupʼs business, assesses them, selects and revises key risks, monitors them, andavoids or mitigates these risks.
Disclosure Control Committee
Chaired by the President. Discusses the necessity of timely disclosure of corporate information and the contents of disclosure.
Internal Audit
Under the direct control of the President, audits the internal
control systems of the Nissha Group, analyzes and evaluates
their status of establishment and operation, and offers suggestions for improvement.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

18-3 Directors of the Board andthe Board of Directors■ Policy and Procedures for Appointment/

Dismissal of Directors of the Board
The Board of Directors of Nissha is comprised of an appropriate
number of Directors, up to twelve. The selection of Directors isdone with respect to the diversity and balance of skills that theBoard requires. In addition, Independent Outside Directors of theBoard comprise at least one third of the Board, and these Independent Outside Directors are those who satisfy the "Standards
for Independence of Independent Officers ” set out by the Boardof Directors.
In the event that a Director of the Board damages the trust or
honor of the company, markedly diminishes our corporate value,or gives rise to grounds that he or she is unfit to perform his or
her duties, the Board of Directors confirms the presence of a valid
reason and makes the Director of the Board subject to a proposal
for dismissal. To ensure clarity in management responsibilities foreach fiscal year, the term of office of Directors of the Board is set
at one year.
Having received reporting from the Nomination and Compensation Committee, based on the policy above, the Board of Directors makes decisions on proposals for the appointment/dismissalof a Director of the Board to be deliberated at the general meeting of shareholders.
* For further information, please follow the link below.
About ＞ Corporate GovernanceStandards for Independence of Independent Officers (PDF)

18-3-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights■ Skills and Diversity Required of Directors of the Board

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Our views on the required fields

The Company considers the optimal and balanced distribution of experience, knowledge, and skills among the Board of Directors in those fields
that are necessary based on our management strategy to be key for the
Board to make important management decisions and exercise high levelsof effectiveness in supervising the execution of the Company's business. In
addition, those fields will change as the business environment changes.
Where we want to be by 2030 is currently presented in the form of ourSustainability Vision (long-term vision for 2030). In addition, we have established a medium-term strategy reflecting backwards the Sustainability
Vision for 2030, and formulated strategies to take us there in the form of
medium-term business plans of three years. For us to achieve them, weconsider the experience, knowledge, and skills in the following fields of particular importance for the Companyʼs Board of Directors.

Internationality

We are a company with a global reach, and our Directors of the Board must have experience of management and business overseas, an awareness of the global business environment, and expertise in them.

Corporate management, Management strategy/ Business development, Business strategies,
M&A / Sales, Marketing / Production, Quality,
Technology, Research and development

To effectively debate growth strategies at the Board of Directors meetings, it is necessary to have practicalexperience and knowledge of the fields to the left.

Experience and knowledge in priority markets

To effectively debate growth strategies at the Board of Directors meetings, it is necessary to have practicalexperience and knowledge of priority markets (Medical Devices, Mobility, Sustainable Materials, IT Devices) stipulated in the 7th Medium-term Business Plan.

Finance / HR strategies / Legal, Risk management

The Board of Directors must have members with practical experience and knowledge in each of the fields
to the left that form the basis for all judgments, in order to make important management decisions andexercise high levels of effectiveness in supervising the execution of the Company's business.

Our views on the required fields and the skills matrix are as follows.

Skills Matrix

Term

Junya Suzuki

22 years and9 months

Areas of particular specialty
Independence Careers at other
Production, Quality,
Experience andGeneration Gender*Outsidecompanies
Corporate management, Business development,
Sales,
Internationality
Technology, Research knowledge in priority FinanceDirectors*Inside Directors
Management strategy Business strategies, M&A Marketingand development
markets

50s

Male

―

〇
〇

〇

〇

〇

〇

Daisuke Inoue

4 years

50s

Male

―

〇

〇

〇

Wataru Watanabe

4 years

50s

Male

―

〇

〇

〇

〇

Yutaka Nishimoto

1 year

50s

Male

―

〇

〇

Hisashi Iso

1 year

50s

Male

―

〇

〇

〇

Kazuhito Osugi

5 years and9 months

60s

Male

〇

―

〇

〇

〇

〇

〇

〇

〇

HR strategies

Legal,
Risk management

〇

〇

〇
〇
〇

Asli M. Colpan

3 years

40s

Female

〇

―

〇

〇

〇

Kazumichi Matsuki

3 years

70s

Male

〇

―

〇

〇

〇

Juichi Takeuchi

―

60s

Male

〇

―

〇

〇

〇

〇

〇
〇

〇

*Term and generation are at the conclusion of the general meeting of shareholders in March 2022.
*The above fields are those where Directors can particularly exercise their specializations based on the experiences, etc. of each member of the Board. It does not show all the experiences, knowledge, or skills possessed by each Director.

Nissha Sustainability Report 2022

18-3-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment■ Role of the Board of Directors
Our Board of Directors convenes for regular meetings once amonth and for extraordinary meetings as needed. The meetings
are chaired by the President.
In order to ensure flexibility and expertise in business judgements, we have in place a system in which matters to be resolved
at the general meeting of shareholders, such as distribution of
surpluses and acquisition of treasury stock, can be decided by the
Board of Directors.
The Board of Directors makes decisions on matters that require
resolution by the Board as stipulated by laws and regulations andour Articles of Incorporation as well as on important managerial
matters as stipulated by the Regulations of the Board of Directors, and oversees business execution by Directors of the Board
and Corporate Officers.
We confirm an investigation into the existence of any transactions between the Company and related parties such as the
Directors of the Board and Audit & Supervisory Board Members,
Corporate Officers, and their relatives, and if any material facts
exist, they will be resolved by the Board of Directors, which will
make a decision after duly deliberating the reasonableness ofthe transaction. In addition, we must obtain the approval of theBoard of Directors when engaging in conflict of interest transactions as prescribed by laws and regulations with the Directors of
the Board.

■ Initiatives to Enhance the Content of Discussions
Our Board of Directors meetings involve brisk, substantive discussions. Independent Outside Directors of the Board draw on deep
insight into their respective fields of specialty to provide accurate

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

advice and opinions, contributing to the enhancement of bothmanagement transparency and the Boardʼs oversight functions.
Toward improving the quality of discussions, we distribute a
meeting agenda and related materials in advance, and explain
particularly important matters to Independent Outside Directors of the Board and Independent Audit and Supervisory Board
Members beforehand. In addition, in order to ensure full discussion, key agenda items such as the medium-term business planand corporate acquisitions above a certain size are discussed asreporting items before being put on the agenda for resolution.
On the other hand, it aims to operate at a suitably balanced paceby allocating time for explanation and deliberation based on theimportance of each agenda item.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

December 2021, we conducted a questionnaire from January to
February 2022 to evaluate the effectiveness of the Board of Directors. The results were analyzed and evaluated, and an outlineof the results was disclosed in a Corporate Governance Reportsubmitted to the Tokyo Stock Exchange in March 2022.

Also, in order to further improve the monitoring function of theBoard of Directors, the status of corporate acquisitions above acertain size and the establishment of subsidiaries and joint ventures are regularly reported to and confirmed by the Board of
Directors.
To secure attendance by Directors of the Board and Audit andSupervisory Board Members, the secretariat of the Board of Directors creates an annual schedule of board meetings and notifies members in advance.

■Evaluation of Effectiveness of the Board of Directors
Since April 2016, our Board of Directors has been working on
continuous improvements to enhance the effectiveness of corporate governance by conducting an annual analysis and evaluation of the composition and operation of the Board of Directors
in the previous year.
For the Board of Directors meetings held in the fiscal year ended

18-3-3

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Reasons for Appointment and Board of Directors Meeting Attendances in FY ended December 2021

Name

Junya
Suzuki

Daisuke
Inoue

WataruWatanabe

YutakaNishimotoHisashi Iso

Reason for appointment

Attendance atmeetings ofthe Board of
Directors

Mr. Junya Suzuki has duly performed his duties as Chairman of the Board, President and CEO, such asdecision-making on important managerial issues and the supervision of the execution of operations.
He has also committed to management from medium- to long-term perspectives and has shownstrong leadership and decisiveness toward the realization of the Nissha Groupʼs Mission since he assumed office as Chairman of the Board, President and CEO in 2007. We appointed him as a Directorof the Board because we believe that he is an appropriate talented person who will continue to carryout sound growth strategies for the Company and supervise the execution of operations.

100％(17/17
meetings)

Mr. Daisuke Inoue has duly performed his duties as a Director of the Board, such as decision-making
on important managerial issues and the supervision of the execution of operations. In addition, heassumes responsibility for business management as Senior Executive Vice President and General
Manager of Devices Business Unit, working to establish and implement marketing-based strategies
for winning new orders while showing strong leadership from the perspective of the Nissha Group as awhole as responsible for Human Resources, General Affairs, and Legal Affairs. We appointed him as a
Director of the Board because we believe that he is an appropriate talented person who will continue
to carry out sound growth strategies for the Company and supervise the execution of operations.

100％(17/17
meetings)

Mr. Wataru Watanabe has duly performed his duties as a Director of the Board, such as decision-making on important managerial issues and the supervision of the execution of operations. As
well as promoting medium-term business plans and verifying their effectiveness as Executive Vice
President, Chief Strategy Officer and Director of Corporate Strategy Planning, he shows strong leadership in accelerating the reorganization of the business portfolio of the Company and expanding
business performance by creating new businesses as Senior Director of New Business Development
Office. We appointed him as a Director of the Board because we believe that he is an appropriate talented person who will continue to carry out sound growth strategies for the Company and supervise
the execution of operations.

100％(17/17
meetings)

Mr. Yutaka Nishimoto has duly performed his duties as a Director of the Board, such as decision-making on important managerial issues and the supervision of the execution of operations. He
assumes responsibility as Executive Vice President, Chief Quality and Production Officer and is showing strong leadership in the establishment of a comprehensive quality assurance system and in thedesign and implementation of the optimum deployment of production capacity in accordance withour business strategy from the perspective of the Nissha Group as a whole. We appointed him as a
Director of the Board because we believe that he is an appropriate talented person who will continue
to carry out sound growth strategies for the Company and supervise the execution of operations.

100％(13/13
meetings)*After heassumed officeas Director of
the Board of
the Company

Mr. Hisashi Iso has duly performed his duties as a Director of the Board, such as decision-making onimportant managerial issues and the supervision of the execution of operations. He assumes responsibility for business management in the global consolidation of the Industrial Materials Business Unit
as Executive Vice President and General Manager of Industrial Materials Business Unit and is showing
strong leadership in establishing and implementing marketing-based strategies for winning neworders. We appointed him as a Director of the Board because we believe that he is an appropriate talented person who will continue to carry out sound growth strategies for the Company and supervise
the execution of operations.

100％(13/13
meetings)*After heassumed officeas Director of
the Board of
the Company

Nissha Sustainability Report 2022

Name

Reason for appointment

Attendance atmeetings of theBoard of Directors

Kazuhito
Osugi

Mr. Kazuhito Osugi has given valuable advice and opinions across the whole range of theCompanyʼs management, making the most of the deep insight in the field of finance hehas cultivated in the Bank of Japan over the years and broad experience fostered by participating in corporate management as an Independent Outside Director of the Boardfor the Company and other companies. Mr. Kazuhito Osugi has duly performed his
duties, such as the supervision of the execution of operations. We appointed him as an
Independent Outside Director of the Board because we expect that he will continue togive his valuable counsel and strive to enhance management supervisory functions froman independent point of view across the whole range of the Companyʼs management.

100％(17/17
meetings)

Asli M.
ColpanMs. Asli M. Colpan has given valuable advice and opinions across the whole range of theCompanyʼs management, making the most of her global perspective and excellent expertise practiced in her research on management strategies and corporate governanceand broad experience and insight cultivated by participating in corporate management
as an Independent Outside Director of the Board for the Company, an outside director
for another company and an independent auditor for another company. Ms. Asli M.
Colpan has duly performed her duties, such as the supervision of the execution of operations. We appointed her as an Independent Outside Director of the Board because
we expect that she will continue to give her valuable counsel and strive to enhance
management supervisory functions from an independent point of view across the whole
range of the Companyʼs management.

100％(17/17
meetings)

Mr. Kazumichi Matsuki has given valuable advice and opinions across the whole rangeof the Companyʼs management, making the most of his experience in proactive andbroad business development and deep insight concerning its governance as he assumed
important posts regarding legal affairs and compliance at a company globally developing
Kazumichi business while participating in corporate management at manufacturers. Mr. Kazumichi
Matsuki has duly performed his duties, such as the supervision of the execution of operMatsuki
ations. We appointed him as an Independent Outside Director of the Board because we
expect that he will continue to give his valuable counsel and strive to enhance management supervisory functions from an independent point of view across the whole range of
the Companyʼs management.

100％(17/17
meetings)

JuichiTakeuchi

Mr. Juichi Takeuchi has broad experience and extensive knowledge in the medical devices market, a priority market of the Company. Mr. Juichi Takeuchi has been engaged inmanagement strategies, alliances, sales and marketing in a medical devices company,
where he led its global strategies and assumed responsibility for its overseas subsidiaries over the years. We appointed him as an Independent Outside Director of the Board
because we expect that he will give his valuable counsel and strive to enhance management supervisory functions from an independent point of view across the whole range of
the Companyʼs management.

Appointed in FY
ending December
2022

18-3-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

18-4 Nomination and Compensation
Committee■ Purpose
We establish a Nomination and Compensation Committee as anadvisory panel for the Board of Directors in order to ensure the objectiveness and fairness of the appointment/dismissal of Directorsof the Board and the appointment of Audit & Supervisory Board
Members, and incorporate the knowledge of Indipendent Outside
Directors of the Board, as well as the compensation of the Directors of the Board. The chair and the majority of the members are
selected from Independent Outside Directors of the Board.

■ RoleWith consultation from the Board of Directors, the Nomination
and Compensation Committee deliberates on and provides a response regarding the following matters.
（1）The appointment/dismissal standards for Directors of theBoard and the appointment standards for Audit & Supervisory Board Members（2）Proposals for candidates for Directors of the Board andAudit and Supervisory Board Members, and proposals for
dismissal of Directors of the Board（3）Proposals for the appointment/dismissal of the Chairmanof the Board, titled directors, and the CEO（4）Matters related to the succession plan for the President（5）Policy on compensation of Directors of the Board（6）Compensation of Directors of the Board

Nissha Sustainability Report 2022

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Membership (as of April 1, 2022)（1）Four independent members:

Kazuhito Osugi (Independent Outside Director of the Board
and Committee Chair)
Asli M. Colpan (Independent Outside Director of the Board)
Kazumichi Matsuki (Independent Outside Director of the Board)
Juichi Takeuchi (Independent Outside Director of the Board)（2）Two inside members:

Junya Suzuki (Chairman of the Board, President and CEO)
Wataru Watanabe (Director of the Board and Executive Vice
President)■ Nomination and Compensation Committee meet-ings held and attendance in FY ended December 2021
During the fiscal year ended December 2021, there were five meetings of the Committee, and all members attended all five meetings.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Datarequirements of not only the Companies Act but also the standards for independence of independent officers, established by
our Board of Directors.
Having received reporting from the Nomination and Compensation Committee, and with prior approval of the Audit and Supervisory Board, based on the policy above, the Board of Directors
makes decisions on proposals for the appointment of Audit andSupervisory Board Members to be deliberated at the general
meeting of shareholders.
At present, our Board consists of four members, of which two
are Full-time Audit and Supervisory Board Members and two are
Independent Audit and Supervisory Board Members. All two Independent Audit and Supervisory Board Members have been designated as independent officers, as they meet the standards of
independence established by the stock exchange and are judged
not to have a conflict of interest with general shareholders.

■ Role of Audit and Supervisory Board Members

18-5

Audit and Supervisory Board Members
and the Audit and Supervisory Board■ Policy and Procedure for Electing Auditors
Our Audit and Supervisory Board comprises an appropriate number of four or fewer members.
Inside Audit and Supervisory Board Members are elected for thewealth of experience required in auditing. Independent Audit andSupervisory Board Members are elected from attorneys and certified public accountants with a focus on specialized knowledge
in legal affairs, financial matters, and accounting, who satisfy theand the Audit and Supervisory Board
Our Audit and Supervisory Board Members and Audit and Supervisory Board audit the execution of duties by Directors, Members of theBoard and Corporate Officers as stipulated by laws and regulations,
our Articles of Incorporation, and internal regulations, and makeappropriate decisions from an independent, objective standpoint onelecting and dismissing accounting auditors and exercising their authority relating to audit fees, etc. Independent Audit and Supervisory
Board Members draw on their highly specialized knowledge as attorneys and certified public accountants to contribute to the maintenance and improvement of our corporate governance structure.
Our Audit and Supervisory Board determines the duties of Audit andSupervisory Board Members, the audit structure, and the audit stan-

18-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

dards that describe the evaluation basis for audits and the action guidelines. In accordance with these,
the Board develops auditing policies and Nissha Group's Corporate Governance auditing plans.
In compliance with the above, Audit and Supervisory Board Members attend Board of Directorsʼ meetingsand other important meetings, review approval documents and other important documents, perform
visiting audits at major offices and affiliated companies, and regularly exchange views with the President
and CEO, Directors of the Board, and General Managers. In order to increase the effectiveness of audits,
Audit and Supervisory Board Members hold regular meetings and coordinate closely with the Accounting
Auditor, Internal Audit, and corporate divisions such as Corporate Finance and Corporate Legal Affairs.
Full-time Audit and Supervisory Board Members regularly hold the Group board of auditorsʼ meetings
with the Audit and Supervisory Board Members of the Nissha Group companies in Japan, at which theyshare information and exchange opinions, as well as work to strengthen and enhance auditing in theGroup companies, such as by holding joint site visits.

Reasons for Appointment and Board of Directors/Audit and Supervisory Board Meeting
Attendances in FY ended December 2021

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Mr. Shigeaki Momo-o is not only well acquainted with corporate legal affairs
as a lawyer but also has broad experience in global business and acquisition ofoverseas corporations as a pioneering international attorney in Japan as well as
deep insight in the medical devices market, one of the priority markets of the

Shigeaki Company. He has been auditing the Company from his professional perspective.
Momo-o He has also participated in corporate management as an Independent Audit
and Supervisory Board Member of the Company and of other companies. We

100％(17/17
meetings)

100％(14/14
meetings)

100％(17/17
meetings)

100％(14/14
meetings)

appointed him as an Independent Audit and Supervisory Board Member since
we believe that he will continue to reflect his experience and deep insight in theaudit of the Company from an independent point of view.
Mr. Yusuke Nakano has deep knowledge of finance, accounting and management administration as a certified public accountant and profound wisdom ingoverning corporate management, and has been auditing the Company fromhis professional perspective. He also participates in corporate management as an

Yusuke independent outside director of the board of another company, an Independent
Nakano Audit and Supervisory Board Member of the Company and an independent audit
and supervisory board member of other companies. We appointed him as an
Independent Audit and Supervisory Board Member since we believe that he willcontinue to reflect his experience and deep insight in the audit of the Company
from an independent point of view.

Name

Reason for appointment

Attendance atAttendance atmeetings ofmeetings of thethe Board ofAudit and
Directors
Supervisory Board

Mr. Tetsuya Taniguchi engaged in operations of corporate communications,investor relations and corporate social responsibility, after having been in chargeof operations in the general affairs, and strived for transparency and clarity in

Tetsuya disclose for shareholders and investors. Also, he has extensive knowledge of the
Taniguchi Nissha Groupʼs business as a whole. In light of such broad experience and deep
insight, we appointed him as an Audit and Supervisory Board Member since we100％(17/17
meetings)

100％(14/14
meetings)

18-6 Compensation of Directors of the Board and Audit
and Supervisory Board Members■ Basic Policy on Compensation of Directors of the Board and Audit andSupervisory Board Members

believe that he is an appropriate talented person who will audit business execution of the Company.
Mr. Kenji Imai is well-versed in the Groupʼs businesses and has broad experienceand deep insight cultivated through his long career of engaging in sales andbusiness strategies in the Industrial Materials and Devices businesses of the

Kenji Imai Company by leading the formulation and implementation of performance andinvestment plans. In light of such experience and insight, we appointed him as
an Audit and Supervisory Board Member since we believe that he can appropriately execute his duties as an Audit and Supervisory Board Member.

Nissha Sustainability Report 2022

Appointed in
FY ending
December
2022

Appointed in
FY ending
December2022

We establish a compensation system for Directors of the Board and Audit and Supervisory Board
Members based on the individual ʼs role in business execution and management oversight, and sothat the role may be fulfilled appropriately, toward linking the compensation with the sustainablegrowth of the Nissha Group and the enhancement of our corporate value over the medium to longterm. In particular, our policy on compensation of Directors of the Board who are responsible forbusiness execution, is to ensure that the system promotes value sharing with our shareholders andcontributes to the improvement of our financial results and corporate value.

18-6-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources■ Policy for determining the details of individual compensation for Directors of
the Board (hereinafter, the “determination policy”)
Method of determining the determination policy
The Company resolved the determination policy at the meeting of the Board of Directors held on
February 19, 2021. The Company consulted the Nomination and Compensation Committee inadvance regarding the details of the resolution made at the meeting of the Board of Directors andreceived its report.
Outline of the details of the determination policy
The Companyʼs compensation plan for Directors of the Board was designed to lead to the sustainable growth of the Nissha Group and the improvement of corporate value over the medium to longterm and to ensure that their respective duties are duly performed.
The basic policy on compensation for Directors of the Board who are responsible for business execution is to promote the sharing of value with shareholders and contribute to the improvement ofcorporate performance and corporate value. The compensation consists of a base salary (monetarycompensation), which is fixed compensation, bonus (monetary compensation), which is shortterm performance-linked compensation, and stock compensation, etc., which is medium- to longterm performance-linked compensation. The base salary (monetary compensation) is fixed monthly
compensation and determined based on the importance of duties each Director of the Board is
responsible for and their positions. The bonus (monetary compensation), which is short-term performance-linked compensation, is based on periodic profit or loss, such as consolidated net sales
and consolidated operating profit, as indicators to function as an incentive to achieve performancetargets for each fiscal year and to encourage appropriate management. The Company determines
the amount of the bonus by evaluating the level of achievement of the performance targets andpays it at a fixed time each year. Stock compensation, etc., which is medium- to long-term performance-linked compensation (non-monetary compensation, etc.), was designed to function as anincentive to promote a sense of contribution to the sustainable growth of the Nissha Group and theimprovement of corporate value over the medium to long term. Specifically, a Board Benefit Trust(BBT) is used. Under this system, the Company awards points to Directors of the Board, etc. according to their titles and the attainment levels of consolidated performance targets as well as medium-term performance targets for each fiscal year during a three-year period covered by the medi-

Nissha Sustainability Report 2022

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Dataum-term business plan. On a fixed date in every final fiscal year of the medium-term business plan,
the Company grants or pays shares in the Company and cash equivalents of such shares at theirmarket value (hereinafter together, “Company Shares”) through the trust according to the number ofpoints awarded. As for indicators for awarding points, consolidated net sales and operating profit areused for the consolidated performance targets for each fiscal year, while the level of achievement ofROE, one of our key business management indicators set forth in a medium-term business plan, isused for the medium-term performance target.
The ratios of compensation by type are determined based on the compensation level of companiesof a similar scale to the Company and those in related industries and general trends.
Compensation for Independent Outside Directors of the Board does not include performance-linked
compensation as they supervise management from a standpoint independent from business execution. It consists solely of a basic salary, which is fixed compensation, and is determined by considering the career and responsibilities of the relevant Independent Outside Director of the Board.
The Company has established a Nomination and Compensation Committee as an advisory panel for
the Board of Directors of the Company. The Nomination and Compensation Committee is chairedby an Independent Outside Director of the Board and the majority of its members are Independent
Outside Directors of the Board. The Chairman of the Board, President and CEO prepares proposedcompensation amounts for Directors of the Board in accordance with predetermined calculation
methods within the range of compensation limits determined at general meetings of shareholders.
Upon consultation by the Board of Directors, the Nomination and Compensation Committee deliberates the details of the proposed compensation amounts and submits a report to the Board of
Directors. The Board of Directors then determines the compensation amounts based on the report.
Reasons for the Board of Directorsʼ determination that the details of compensation for Directors of the Board for the fiscal year ended December 2021 are in line with the determination policy
The Nomination and Compensation Committee deliberated on the individual compensation for
Directors of the Board for the fiscal year ended December 2021 from various viewpoints and confirmed that the details of compensation for Directors of the Board and the determination process
are in line with the determination policy. With respect for the report from the Nomination and Compensation Committee, the Board of Directors determined that the details of compensation are inline with the determination policy.

18-6-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources■ Matters regarding compensation for Audit and Supervisory Board Members

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

18-7 Corporate Officers

Compensation for Audit and Supervisory Board Members is determined through discussions
among Audit and Supervisory Board Members within the range of compensation limit determinedat a general meeting of shareholders. It consists solely of a fixed basic salary as Audit and Supervisory Board Members are responsible for auditing the entire Nissha Group from an independent
standpoint.

To respond flexibly to changes in the business environment, Nissha considers it important that theexperiences, knowledge, abilities, ages, and so on of Corporate Officers be both the best and distributed without bias. The term of Corporate Officers is one year.

■ Diversity of Corporate Officers (as of April 1, 2022)■ Results of FY ended December 2021

At present, we have 16 Corporate Officers, of which two are foreign nationals.
Compensation by category (Million yen)

Title

Total
compensation(Million yen)

Corporate Officers include persons with experience of working overseas or at other companies, aswell as those with expertise such as those with master's or doctoral degrees.

Fixed
compensation

Performance-relatedcompensation

Base salary

Stock compensation,
etc.
Bonuses(Non-monetarycompensation, etc.)

Number ofmembers

Directors of the Board(Excluding Independent
Outside Directors of the

328

169

113

45

7

28

28

―

―

2

53

53

―

―

6

Board)
Audit and Supervisory
Board Members(Excluding Independent
Audit and Supervisory
Board Members)
Independent Outside Directors and Independent
Audit and Supervisory
Board Members

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

19. Initiatives of Internal Audit Office 20. Internal Control System
19-1 Systems
In order to maintain independence and objectivity, the Internal Audit Office is independent of operating departments
and is under the direct control of the Chairman of the Board, President and CEO. It conducts regular annual audits of
all Nissha Group operations in accordance with the annual plan. After the audit, the departments concerned are given advice and recommendations, and follow-up audits are conducted to check the status of the improvements. Audit
results are reported and advice given at monthly meetings with the Chairman of the Board, President and CEO, andparticularly important matters are reported to the Board of Directors. Also, meetings are held with full-time Audit andSupervisory Board Members every three months to ensure mutual cooperation with the Audit and Supervisory Board.

Nissha has established an Internal Control Policy by a decision of the Board of Directors to provide asystem to ensure the appropriateness of work as stipulated by the Companies Act. Nissha is working
to improve our corporate value by constructing and operating an Internal Control System to guarantee that the work in each of the companyʼs organizations is being done legally, appropriately, and efficiently. To ensure reliability of financial reporting, we submit the assessment results of our internal
control system in the form of internal control reports to the Prime Minister of Japan and disclose thecontents to our shareholders and investors.

19-2 Audit Content
Audits by Internal Audit are broadly classified into "internal control audits" based on the Financial Instruments andExchange Act and "theme audits". Internal control audits are conducted jointly with accounting auditors by selecting the scope of evaluation from the perspectives of company-wide controls, financial reporting, business processes, and IT controls. This auditing is aimed at guaranteeing the reliability of financial reporting as a result of assessing the effectiveness and efficiency of the Nissha Groupʼs business activities, determining whether the Groupʼsbusiness activities are in compliance with laws and regulations, and including whether key risks managed by the
Risk Management and Compliance Committee, including the prevention of corrupt practices by the Group, arebeing carried out appropriately and effectively in accordance with internal regulations. On the other hand, theme
audits are done for risks that cannot be covered by the above. In these audits, risk analyses are carried out based on
the trends at the start of the year, and themes are selected on importance. Refer to 21-4 Risk Assessments

19-3 Initiatives for FY ended December 2021
In the fiscal year ended December 2021, in addition to an internal control audit, a theme audit was carried out on
the digitalized work processes constructed to keep pace with the promotion of DX. An audit was also carried out
related to the overall business management of domestic and overseas affiliated companies selected through risk
analysis. In future, we intend to monitor the status of the development of a global control environment that incorporates new business fields in its scope.

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

21. Risk Management and Compliance
The Nissha Group established a new Risk Management and Compliance Committee in the fiscal
year ending December 2022. The Committee works to understand risks that could impede smoothbusiness operation, and promote activities that reduce risk such as preventing problems before theyarise, or minimizing their effects, and preventing their recurrence.

21-1 Risk Management Policy

In addition, based on the view that centralized identification, assessment, and management of the
Nissha Group's risks on a global basis are important, it revises the risk management system.
Note that the materialities that the Sustainability Committee managed until the fiscal year ended
December 2021, namely “promotion of compliance,” “promotion of health and productivity management,” “occupational health and safety,” “advancement of quality control,” “continuity of business activities,” and “protection and utilization of information assets” are managed by the Risk Management
and Compliance Committee as particularly important items for smooth business operation.
Refer to 3. Nissha Group Sustainability

Risk Management Policy
Nissha Group strives to accurately identify the risks we face, avoid unexpected loss, and appropriately control risks, thereby ensuring business continuity and enhancing our corporate value toward realizing the enrichment of peopleʼs lives by creating technology and developing it into economic and social value.
1. We build and maintain a structure for responding to the various risks present in our business environment.
2. We promote risk management at the managerial level toward conducting organization-wide activities
and preserving management resources.
3. In the event of an emergency, we work to minimize damage, resume business activities as quickly as
possible, and prevent recurrence.
4. We conduct in-house training to enhance awareness of and the ability to respond to risks, and ensurethat each employ takes responsible, swift, and appropriate action.
5. We periodically review our risk management structure, including this policy, and make improvements
on a continuous basis to ensure effective risk management at all times.

Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd
Established on July 1, 2015 / Revised on January 1, 2022

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Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

21-2 Corporate Ethics and Compliance Guidelines

21-3 Risk Management Structure

The Group has sets “Act with Integrity” (we shall act with sincerity and remain a trusted company) as
one of the Shared Values that are principle of employee behavior. And we declared that each officer
and employee should act in good faith and continue to be a trusted company. Based on this, we established the Corporate Ethics and Compliance Guidelines, which sets out the basic ideas concerning
corporate ethics and compliance that each officer and employee is expected to follow.

Nissha has established a Risk Management and Compliance Committee chaired by Director of theBoard, Senior Executive Vice President (in charge of legal affairs) and with a Senior Vice President(Chief Supply Chain Officer, CSCO) as vice chair. The Risk Management and Compliance Committee
holds progress confirmation meetings at the annual general meeting and every quarter, and reports
to the Board of Directors each year on the status of activities.

In addition, the Nissha Group has prepared the Corporate Ethics and Code of Conduct Manuals as away to more clearly embody the Corporate Ethics and Compliance Guidelines and make it more understandable to our employees. Along with distributing this to all employees, it has also been postedon the Nissha intranet. This Manual was prepared in Japanese, English, Chinese, and Vietnamese,and having the entire company study it at the same time is designed to ensure awareness, alongwith the Corporate Ethics and Compliance Guidelines.

The Risk Management and Compliance Committee centrally manages the cross-company risks,business risks, and financial risks of the Nissha Group on a global basis. Of these, the Committee
selects key risks at the annual general meeting for the cross-company risks. The selected key risks
are set as key performance indicators for the core departments or subcommittees, and minimized
through their activities. In addition, the status of these activities is reported in the progress meetings,
and the Committee checks whether the KPIs it has set are progressing as planned, using the PDCA
cycle (risk items that are materialities have their progress managed by the Sustainability Committee).

Corporate Ethics and Compliance Guidelines
Nissha Group acts according to the “Principles” in order to realize the enrichment of peopleʼs lives by always
creating technology and developing it into economic and social value.

Principles
1. We value and hold on to high ethical standards, integrity in our actions, and act with good common
sense through our responsible behavior.
2. We pursue the Co-existence with the Stakeholders including our customers, shareholders, suppliers,
local communities and our employees.
3. We will comply with all laws and regulations, internal corporate regulations, and socially accepted rules
and norms, also act according to “Corporate Ethics and Code of Conduct”.
4. If we witness any actions contrary to the “Corporate Ethics and Code of Conduct" or are suspicious ofcertain behaviors or decisions, we should immediately report to and consult with our supervisors.

The Monthly Business Review (MBR)
for each business organization and thecorporate finance department, and theInvestment Committee manage business risks and financial risks. Progress isreported at the Annual General Meeting,and the Committee checks the contents.
In addition, if a major risk incident arises(including a serious report to the hotline),
the Risk Management and Compliance
Committee may be convened on an
emergency basis.

Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd
Established on April 1, 2012 / Revised on January 1, 2022

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Nissha Group
Sustainability

Environment

21-4 Risk Assessments

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

1.

Fair business practices (corruption and bribery, antitrustor anti-competitive practices, insider trading, etc.)

Nissha selects risks by carrying out risk assessments over theentire Group and selecting from both a business activity perspective and a company-wide perspective. In the business activity
perspective, hearings are held with related departments andsubcommittees, and, after assessing them based on the frequency of these risks occurring and the severity of their impact, anassessment is made that also takes into account control activities to suppress them happening. Then, assessing them from acompany-wide perspective in order to work to integrate the risks
selected from a business activities perspective with management
strategies, the key risks are selected.

2.

Labor and human rights (discrimination, harassment,
forced labor, workplace safety and health, etc.)

3.

Ensuring personnel (employment, training, etc.)

4.

Ensuring quality and safety of products/services (quality
falsification, etc.)

5.

Ensuring quality and safety of medical products/services (recalls, serious complaints)

6.

Intellectual property rights (respect and protection of
intellectual property)

7.

Supply chain management (improprieties in supply
chain, etc.)

The Risk Management and Compliance Committee, which wasestablished in January 2022, carries out risk assessments on thefollowing 16 items under its purview. The departments or subcommittees that manage the key risks selected through this risk
assessment set KPIs, and work to mitigate these risks throughtheir activities.

8.

Environmental protection (climate change, waste emissions, chemicals management, etc.)

9.

Trade management (import/export management)

The following items are also positioned as content for corporate
ethics and compliance that officers and employees of the Nissha
Group should follow.

12. Business continuance (natural disasters such as earth quakes, typhoons, floods, etc.)

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

10. Information systems (leaks of confidential/personal information, etc.)
11. Asset management (theft or loss of company assets)

13. Business strategies (changes in competitive/market environments)
14. Business development (development delays, interruption in technology)
15. Production activities (design defects, release of defec tive products)
16. Finance (failure of capital planning, exchange rate fluctuations)*Items in parenthesis are examples of risks.

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Nissha Group
Sustainability

Environment21-5 Promotion of Corporate Ethics
and Compliance
The Risk Management and Compliance Committee promotes
corporate ethics and compliance activities throughout the entire
Nissha Group. All Nissha Group bases in Japan and overseas appoint managers and group leaders in charge of promoting corporate ethics and compliance.

■ Promotion Structure
The managers and group leaders in charge of promoting corporate ethics and compliance not only implement initiatives toimprove the awareness of corporate ethics and compliance intheir respective divisions but also implement corporate ethics andcompliance on a day-to-day basis through organizational management, serve as handy consultants for their workplace, and,should an incident arise, work with Corporate Legal Affairs to deal
with it.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement■ Awareness-raising activities
Corporate Legal Affairs also publishes Corporate Ethics and Compliance News as a way to further boost awareness among thesemanagers and group leaders. In the fiscal year ended December
2021, it created content on the theme of issues with labor management (including harassment) in teleworking and an outline of
the Anti-Monopoly Act.
In addition, the “ OK or Not? Corporate Ethics and Compliance
Consultation Desk ” section on the Nissha Group intranet features timely points about areas of particular concern, using casesthat happened both within Nissha and outside as examples. In
the fiscal year ended December 2021, “ OK or Not ” explained
how to handle copyright when using photos or illustrations.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

In the fiscal year ended December 2021, we included harassment,
the appropriate handling of information, and the quality and safetyof products as training themes at our domestic bases. At our basesin Europe and North America, we created videos about the Corporate Ethics and Code of Conduct Manual, which was watched by
employees at each base. At Asian region bases, online training isprovided by personnel in charge of administrative divisions. Thus, for
all Nissha Group bases, training is tailored to the laws, regulations,and customs related to local business operations.

■ Training

Questionnaires are sent out after each company-wide simultaneoustraining session to collect a wide range of information and opinionsfrom all employees about concerns and actions that need to be
improved in the workplace from the perspective of corporate ethics
and compliance. Examples and results of improvements based on
this information are reported to management, along with reports
on training implementation.

The Group designates every October and November as Corporate
Ethics and Compliance Months, and provides groupwide training at
all bases in Japan and overseas. This simultaneous training is provided not just for full-time, contract, and temporary employees, but for
managers of subcontractors and even part-timers.

In addition to the above, to enable us to promote this particularly in
the Medical Devices field, one of our priority markets, in the fiscal
year ended December 2021 we set up a legal compliance system
for the Pharmaceutical and Medical Device Act at our domestic
bases, and opened a Medical Healthcare Consultation Desk.

Corporate Ethics
and Compliance Structure

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Nissha Group
Sustainability

Environment21-6 Hotline
The Nissha Group has in place an Internal Reporting Code anda hotline based on the Whistleblower Protection Act for the
purposes of quickly identifying the facts about illegal, unfair, orunethical conduct by an organization or individual, minimizing
the risk of a crisis, promoting ethical and legal compliance, andultimately enhancing our corporate value.
We are working to disseminate information about the hotline
through the Corporate Ethics and Code of Conduct distributed toall employees, the Labor and Human Rights Handbook, the Nissha Group intranet, and in-house training. All employees working
for the Group in Japan and overseas can use this service, and in
the fiscal year ended December 2019, we expanded the scopeof users by establishing a contact point for some of our domestic
suppliers. This contact point is an outside attorney, an independent and impartial third party.
The Internal Reporting Code contains the following.
• The whistleblower shall not be subjected to any disadvantageous treatment by the Company or other employees dueto their report.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

as necessary, after which, measures are taken according to theresults of the investigation and discussion.

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Hotline Organizational Chart

The number and main content of consultations received during
the fiscal year ended December 2021 are shown below.
• Hotline (for employees): 7 cases (mainly related to workplace environments and human relations)• Supplier hotline: 0 cases

21-7 Dealing with Antisocial Forces
In accordance with our basic policy for dealing with antisocial
forces and our regulations for dealing with antisocial forces,
etc., Nissha has established that it will have no dealings whatsoever with antisocial forces. In principle, we confirm in advancethrough the prescribed procedures that our existing and new
business partners are not members of antisocial forces. This has
cut off all possibilities of involvement in money laundering by antisocial forces.

• Anonymous reporting is also possible.
All complaints received are relayed from the hotline (an outside
attorney) to the Corporate Legal Affairs. The Corporate Legal
Affairs liaises with the relevant departments after consultingwith the outside attorney about the best way to investigate andconfirm the issue. Said investigation and confirmation are thencarried out with consideration for the protection of the whistleblower. The content is reported to management at the Risk
Management and Compliance Committee, where it is discussed

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

22. Initiatives Related to Anti-corruption
22-1 Anti-Corruption Guidelines

22-2 Efforts to Ensure Awareness and Internal Audits

For the bribery, back-scratching relationships with business partners issue that is one of the key risks
managed by the Risk Management and Compliance Committee, the Nissha Group has formulated
the Nissha Group Anti-Corruption Guidelines, and made our bases in Japan and overseas aware of
the content.

Training is provided for all operations of the Group to ensure compliance with the relevant laws, regulations, and customs.
In addition, as bribery is a deeply-rooted practice in some countries and regions, internal audits on
anti-corruption are conducted on a regular basis.
The Group has not identified any cases of corruption in the fiscal year ended December 2021.

Nissha Group Anti-Corruption Guidelines
The Nissha Group makes clear that all officers and employees are prohibited from presenting customers,
suppliers, and government officials, either directly or indirectly, with gifts or entertainment that may constitute corrupt practice, and observes Japanʼs Unfair Competition Prevention Act, the United Statesʼ Foreign
Corrupt Practices Act, the United Kingdomʼs Bribery Act, and the regulations of other countries and regions
regarding anti-corruption.
1. We neither present to nor accept from customers, suppliers, and government officials offers of unfair
advantage.
2. We neither present to nor accept from customers, suppliers, and government officials offers with gifts
or entertainment that exceed the limit permitted by internal standards, laws, and regulations.
3. We strive to understand the circumstances of the Nissha Group overall, and periodically review ourinitiatives.
4. We respond with sincerity to requests from our customers for cooperation in investigations, by providing
necessary information.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on April 1, 2017 / Revised on January 1, 2018

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

23. Business Continuity
23-1 Policy and Principles

23-2 Structure

We at the Nissha Group establish the Business Continuity Plans Policy, which the Business Continuity
Management (BCM) Subcommittee of the Risk Management and Compliance Committee plays a central
role in promoting in preparing for and responding to emergencies such as a natural disaster or pandemic.

The BCM Subcommittee has been set up under the Risk Management and Compliance Committee
as a system for operating BCM in the Nissha Group.

Business Continuity Plans Policy
Nissha Group formulates business continuity plans to minimize damage and work towards prompt businessrecovery, while ensuring the safety of human life first, in the event of a major natural disaster, fire, power cut,
epidemic, or other major event that interrupts business. In addition, we carry out regular revisions and drills toensure the effectiveness of these plans, and promote business continuance management.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

The person responsible for BCM activities is the President. Our secretarial office holds BCM Subcommittee meetings on a regular basis. These are used to confirm initiatives and the status of improvement of BCM measures for the Nissha Group overall, training persons in charge, and planning andcarrying out BCM drills.

Business Continuity Plans Principles
1. In the event of a major interruption of our business, we shall ensure the safety of human life as our top priority
while preventing secondary disasters.
2. We shall define buildings, equipment, information systems, human resources, and suppliers as key management resources/ stakeholders, and formulate business continuity plans. In addition, we shall consider changes
in the business environment and regularly revise these plans.
3. We shall clarify which businesses are to be prioritized for continuance/ recovery, and achieve this recovery
within the target timeframe.
4. We shall regularly conduct training and drills related to business continuance, and work to improve our organizational capacity to respond to risks.
5. We shall contribute to society through working with local communities to support recovery and rebuilding.
6. We shall comply with laws, policies in Japan and overseas, and other norms with regards to business continuance.
Daisuke Inoue
Director of the Board, Senior Executive Vice President, General Affairs
Nissha Co., Ltd.
Established on September 28, 2006 / Revised on May 1, 2022

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment23-3 Initiatives
Nissha has in place a set of Emergency Response Regulations
that defines “emergency” and stipulates the action and structure
required between initial response to a disaster and the early stages of business recovery. In the event of a serious interruption ofbusiness due to emergency over a certain level, such as a natural
disaster or pandemic, we set up a response task force headedby the President. We also stockpile supplies at major bases inJapan, distribute “survival cards” listing information about what
to do when an earthquake strikes, educate employees using ane-learning system, and conduct emergency training to promotethorough awareness about the general rules for action and response in an emergency.
Our Basic Plan for Business Continuity Management (BCM) stipulates in detail the steps to be taken in order to promote earlyrecovery of key business locations. In efforts to verify the effectiveness of these steps, we organize business continuity planning(BCP) exercises on a regular basis for employees including themanagement. We respond quickly to changes in management
environment and reorganization, such as managing the latest
editions of relevant documents.
In the fiscal year ended December 2021, like the previous fiscal
year, to ensure that the novel coronavirus disease (COVID-19) did
not spread within the company, we worked on business continuity by taking measures in response to changes in the government,
local authority, or company status, revising the Guidelines as apolicy to follow, while also preparing individual manuals.

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Response to Preventing the Spread of COVID-19

Training at Major Bases

On the same day that the state of emergency was declared, April

We hold BCP (Business Continuity Plan) drills annually in accordancewith the BCP Subcommittee Action Plan. These drills are simulations
to check that BCP functions adequately in the event of an incident
such as an earthquake.

7, 2020, we set up a response task force headed by the President(the Response Task Force). At the Response Task Force, to fulfill
our duty of supply to our customers, we carried out a range ofinitiatives to prevent infection spreading, in order to ensure there
were no clusters in the company. Specifically, we achieved a balance between work performance and preventing the spread of infections by minimizing travel and avoiding the “Three Cs” throughthings like telework and web conferencing, and by ensuring that
employees are made aware of information about infection prevention and health management, and put these into practice. In
addition, in July and August 2021, and March 2022, we organized workplace vaccinations at the Kyoto Global Headquarters toensure employees could be vaccinated as soon as possible. Many
employees took advantage of this measure.

The drill in the fiscal year ended December 2021 was based on Nissha
FIS, Inc. being damaged by an earthquake along the Uemachi Fault,
Osaka, with a maximum seismic level of 7 on the Japanese intensity scale.
In this drill, task forces were quickly set up at the Headquarters and FIS,
and damage reports and specific instructions were issued for buildings
and equipment, information infrastructure, employees, suppliers, andso on. The drill was very realistic, with the safety status of employees,
effects on production, recovery status, delivery status, supplier stock
checks and so on being reported moment by moment as their situation
changed, and appropriate instructions given on a case-by-case basis.
Issues for the future were also discussed once the drill was over.
The construction and operation of BCP/BCM is considered importantfor improving the company ʼ s competitiveness and also leads toimproved corporate value, which is why these drills will be carried oneach year henceforth.

Headquarters task force

Workplace vaccinations

FIS task force

Nissha Sustainability Report 202223-3-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Risk Surveys
The Nissha Group carries out annual risk surveys at affiliatedcompanies in Japan and overseas. These surveys draw on theexpertise of specialists in risk consulting. For the fiscal year ended
December 2021, the surveys covered the Nitec Precision andTechnologies, Inc. Himeji Factory and Kaga Factory.
The risk of fire or explosion was assessed in terms of fire
management, building and motive power, use and processes,
fire-fighting equipment, and fire hazards, while for natural
hazards, disaster prevention measures for lightning, earthquakes,
flooding and so on were also confirmed.
While the results were good overall regarding measures, someareas for improvement were noted, so we are increasing thedisaster prevention level by quickly dealing with these in detail.

NPT Himeji Factory

Nissha Sustainability Report 2022

NPT Kaga Factory

23-3-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

24. Tax Principle
Nissha Group will compliance with tax laws and regulations in each country and each region based on Tax Principle, in order to fulfill our corporate social responsibilities (CSR).

Tax Principle

Therefore, We will strive to provide necessary information appropriately and cooperatively in response to requests from tax authorities in each country and region while issuing tax returns properly and paying appropriate

Basic Principle

amount of tax according to tax laws and regulations in each country and region.

Nissha Group will strive to minimize tax risks, enhance our corporate value by complying with tax laws and reg-

If tax authorities inform us of tax adjustments, we will immediately take appropriate measures to prevent simi-

ulations in each country and each region.

lar issues happen unless we file a petition of objection against their action or interpretation.

Nissha Group will pay close attention to the trends in the international tax framework such as Base Erosion
Profit Shifting (BEPS) project and make properly responses to such changes as a global company.
1. Nissha Group's approach to tax planning
Nissha Group will enter into transactions with a business purpose and a business activity and in case we approach

4. The approach of Nissha Group to risk management and governance arrangements in relation totaxation in each country and region
Nissha Group's tax policy is reviewed and controlled by our group's Chief Financial Officer who is responsible
for our groupʼs tax strategy and policies, and the status is reported to Board of Directors on an on-going basis

to tax planning, we will implement it properly and efficiently in compliance with tax laws and regulations.

through our groupʼs Chief Financial Officer.

Our group will consider taxes as an essential factor in our business planning and make use of available tax

Where there is significant uncertainty or complexity in relation to application or interpretation of tax laws, we

incentives within the scope of normal business activities. However, we will not engage in transactions for thewill take appropriate measures after seeking external advices.

primary purpose of tax avoidance and transactions without any actual business activities.

Hitoshi Koya
Senior Vice President, Chief Financial Officer

2. The level of risk to taxation that Nissha Group is prepared to accept
Nissha Group's Tax Principle is to minimize tax risks wherever possible when undertaking tax matters.
We will work to identify, evaluate, and manage tax risks in each country and region to reduce such risks, andwhere there is significant uncertainty or complexity in relation to tax risks, we will ask for advice from third parties.

Nissha Co., Ltd.
Established on December 25, 2017
Revised on May 1, 2022

3. The approach of Nissha Group towards its dealings with Tax authorities in each country and region
Nissha Group believe that we can build and maintain good relationship with tax authorities in each country andregion corresponding with them and disclosing necessary information in a sincere and appropriate manner.

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

25. Initiatives Related to Conflict Minerals
25-1 Policy

25-2 Initiatives

Nisshaʼs policy on conflict minerals is outlined in our Basic Approach to Responsible Mineral Procurement. In line with this policy, we are working to ensure that our products do not use materials
made from conflict minerals, which are a source of funds for armed groups involved in human rights
abuses such as looting, violence and forced labor.

The only conflict minerals used in the products of our group are the tin used for vacuum metallized
foil, one of the transfer foils produced by the Industrial Materials business, the tin used for ITO films
for touch sensors and the gold used for FPC plating produced by the Devices business. We do not use
any tin or cobalt in molding resin.

Basic Approach to Responsible Mineral Procurement

Nissha Group is required by our customers to report using the latest version of the Conflict Minerals Reporting Template (CMRT) issued by the Responsible Minerals Initiative (RMI). Recently, we arereceiving surveys from our customers concerning minerals other than the 3TG (tin, tantalum, tungsten, and gold) such as cobalt.

The Nissha Group is deeply concerned that a portion of the conflict minerals extracted by the Democratic
Republic of the Congo and its neighboring countries are being used as a source of funding for militia thatthrough acts of looting, violence and forced labor are infringing on fundamental human rights.
In April 2012, Nissha became a signatory to the “Global Compact” as advocated by the United Nations. We
at Nissha Group have fully embraced the Ten Principles stated in the Global Compact as a cornerstone of our
Corporate Mission. Based upon our recognition of the importance of these principles and aiming for co-existencewith our stakeholders, we are committed to non-use of these conflict minerals, as raw materials in our products
as they result in an infringement of basic human rights. Accordingly where our company becomes aware of theuse of any conflict minerals, we will immediately implement all measures required regarding that use.
1. Nissha Group is presently implementing ongoing control systems for conflict minerals which we maintaincontinuously.
2. Nissha Group will promptly provide to its customers conflict minerals information including its smelters, etc.
3. Nissha Group in respect of this issue will publish the relevant information in its sustainability reports.

This is why we use a Safety Data Sheet (SDS) or other methods to check all materials used in our
products to identify those that contain conflict minerals. We also ask our suppliers, who procure materials for our products, not to use any conflict minerals connected with violations of human rights,
and that they report using the latest version of the CMRT to allow us to confirm the contents. If there
is an inquiry about the region where the conflict minerals are produced after the CMRT is submitted
to our customer, we go back through the records to check multiple suppliers. If these checks find any
concerns about the use of conflict minerals that may lead to infringement of human rights, we willsuspend the use of such minerals and take immediate corrective measures.
Thanks to these initiatives, we found no cases of the use of conflict minerals related to human rights
violations in our products in the fiscal year ended December 2021. Our gold is largely sourced in linewith the guidance of the London Bullion Market Association (LBMA), and we have confirmed that
other conflict minerals do not involve human rights violations.

We will continue to make sincere efforts for the responsible procurement of related minerals in order tofulfill our corporate social responsibilities.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on March 12, 2014 / Revised on January 1, 2018

Nissha Sustainability Report 2022

25

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

26. Management System and other Certification Acquisitions(as of June 2022)

The Nissha Group's management system and other certification
status is as follows.

Standards
Subject Areas(Domestic)*1. Administration departments of domestic sites are not included in the scope of certifica-

ISO9001*1

Qualitytion (excluding Nissha FIS, Inc.).
*2. For departments related to Medical Technologies (Vermed products).
*3. Obtained at the Kyoto Factory in the manufacture of microneedle patch for cosmetics.
*4. For the support departments related to the touch sensor module for automotive.
*5. Only administration departments and design and product development departments
have obtained certification.
*6. For paper purchasing departments at Nissha Printing Communications, Inc.
*7. RB Business and Product Development and Nitec Precision and Technologies, Inc. (Kyoto)were newly certified on June 1, 2022.
*8. Certification is included in the Kameoka Factory of Nissha Co., Ltd.

Nissha Co., Ltd.
Global Headquarters
Tokyo Division Headquarters〇

ISO13485

Medicaldevices〇 *2

ISO22716

IATF16949

ISO14001

Nitec Industries, Inc.
Headquarters / Koka Factory
Kameoka Factory
Nitec Precision and Technologies, Inc.
Headquarters / Himeji Factory

ISO45001

Occupational
Cosmetics

Automotive Environment

Energyhealthand safety

〇 *3

〇 *4

〇 *5

〇

ISO27001

Information

〇

〇 *4

〇

〇
〇

〇
〇

〇
〇 *8

〇

〇

〇

〇

〇

Tsu (production base)〇〇Nissha FIS, Inc.

FSC COC*6〇〇 *7

Kaga Factory
Kyoto (production base)

Otherssecurity〇

Nagoya Sales Office
Kameoka Factory

ISO50001

〇 *7
〇

〇

〇

〇

〇

〇

Nissha SiMICS, Inc.
Nissha Printing Communications, Inc.
Headquarters / Kyoto〇〇

FSC COC

Osaka Sales Office〇〇

FSC COCTokyo Sales Office〇〇

FSC COC

Kameoka Factory

〇

〇 *8

FSC COC

Nissha F8, Inc.
F8 Studio
NISSHA Studio〇〇〇

M crossing Co., Ltd.
Nissha Business Service, Inc.

Nissha Sustainability Report 2022

〇

〇

〇

26-1

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data(as of June 2022)

Standards
Subject Areas(Overseas)

ISO9001

Quality

ISO13485 ISO22716

Medicaldevices

IATF16949

ISO14001

ISO50001

Cosmetics Automotive Environment

Energyand safety〇

Nissha PMX Technologies, S.A. de C.V.
Nissha Metallizing Solutions N.V. (Belgium)

〇
〇

〇

〇

Otherssecurity

Nissha Metallizing Solutions GmbH (Germany)

〇

〇

〇

Nissha Metallizing Solutions Ltd. (U.S.A.)〇FSC COC〇FSC COCPEFC
EN15593
FSC COCPEFCFSC COC〇〇FSC COC〇

Lead-Lok, Inc.

〇

CEA Medical Manufacturing, Inc.

〇

Sequel Special Products, LLC〇

Nissha Medical Technologies (Ohio), Inc.

〇

European Headquarters
Nissha Medical Technologies Ltd.

〇

Nissha Medical Technologies SAS〇

Graphic Controls Acquisition Corp.

〇〇

EC93/42/EEC

Nissha Medical Technologies GmbH & Co. KG

EC93/42/EEC〇

CEA Global Dominicana, S.R.L.

Nissha Sustainability Report 2022

Information

Scheduled
to obtain in
November
2022

Nissha Metallizing Solutions S.r.l. (Italy)

Nissha Schuster Group
Nissha Schuster Kunststofftechnik

healthISO27001〇

Nissha Eimo Technologies

Nissha Metallizing Solutions Produtos Metalizados Ltda (Brazil)
Nissha Medical Technologies Group
Corporate Headquarters

ISO45001

Occupational

〇

〇

〇

〇

〇

〇

Nissha Back Stickers〇

Nissha Back Stickers International〇

Nissha (Kunshan) Precision IMD Mold Co., Ltd.

〇

〇

〇

Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

〇

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

〇

〇

26-2

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

27. Third Party Verification
The Nissha Group has received a verification statement fromDNV Business Assurance Japan K.K. on the accuracy of the CO2
emissions data contained in this report in order to improve thereliability of our environmental performance data.

Nissha Sustainability Report 2022

27

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

28. GRI Content Index
GRI Standards

Disclosure Item
102-13Nissha Sustainability Report 2022 refers to GRI Sustainability Reporting Standards. The relationshipbetween the standards and the content of our report are as shown in the table below. Unless otherwise specified, the location indicate the pages of Nissha Sustainability Report 2022.

Membership of associations

Location of Nissha Information Posted

Pages on PDF

3-6-1 Initiatives in which Nissha participate ＞ Japan
Clean Ocean Material Alliance

3-6-1

3-8-3 Membership in Community Organizations

3-8-3（Nissha）

2. Strategy
GRI Standards

Disclosure Item

Location of Nissha Information Posted

Pages on PDF

General Disclosures
1. Organizational profile
GRI 102：General
Disclosures 2016

102-1

Name of the organization

102-2

Activities, brands, products, and ser- Website About > Nissha's Business
vices

102-3

Location of headquarters

Website About > Company Outline

102-4

Location of operations

Website About > Nissha Group

102-5

Ownership and legal form

Website About > Company Outline

102-6

Markets served

Website Business > By Industry

102-7

Scale of the organization

Website About > Company Outline

2. CEO Message

2

102-15Key impacts, risks, and opportunities 2. CEO Message

2
3-3

3-4 Promotion Framework for Sustainability

3-4

3-5 Materialities (Key Issues) and KPIs

3-5-1

3-1 Nissha Philosophy

3-1

102-16

Values, principles, standards, andnorms of behavior

102-17

Mechanisms for advice and concerns 11-4 Harassment Prevention
about ethics
21-6 Hotline

11-4

Governance structure

3-4 Promotion Framework for Sustainability

3-4

18-2 Overview of Corporate Governance

18-1

3-4 Promotion Framework for Sustainability

3-4

21-2 Corporate Ethics and Compliance Guidelines

21-2

21-6

4. Governance

Information on employees and other 12-2-1 Nissha Group Employee Composition
workers

12-2-1102-9

Supply chain

16. Partnership with Our Suppliers

16-1

102-10Significant changes to the organization and its supply chain

1. Editorial Policy

1-1

102-11

Precautionary Principle or approach

4. Environmental Policy and Management Structures

4-1

20. Internal Control System

19, 2021. Risk Management and Compliance21-1

2. CEO Message

2

3-6-1 Initiatives in which Nissha participate ＞ United
Nations Global Compact, TCFD (Task Force on Climate-related Financial Disclosures)

3-6-1

102-18102-19Delegating authority

102-20Executive-level responsibility for
3-4 Promotion Framework for Sustainability
economic, environmental, and social
topics3-4

102-21

Consulting stakeholders on econom- 3-4 Promotion Framework for Sustainability
ic, environmental, and social topics
11-5 Relationship with Labor Union

3-4

18-2 Overview of Corporate Governance102-22102-23Nissha Sustainability Report 2022

3-3 Nisshaʼs Value Creation Process

3. Ethics and integrity

102-8

External initiatives

Statement from senior decision-makerWebsite About > Company Outline

Website About > Nissha's Business

102-12102-14Composition of the highest governance body and its committees
Chair of the highest governance
body

18-1

11-4

12-2-1 Nissha Group Employee Composition

12-2-1

18-2 Overview of Corporate Governance

18-1

18-3 Directors of the Board and the Board of Directors> Role of the Board of Directors

18-3-328-1

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item102-24

Nominating and selecting the highest governance body102-25

Conflicts of interest

102-26

Collective knowledge of highest
governance body102-28

Evaluating the highest governancebodyʼs performance102-30

Human Resources

Location of Nissha Information Posted
18-3 Directors of the Board and the Board of Directors

Disclosure Item

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Location of Nissha Information Posted

102-34Nature and total number of criticalconcerns

3-4 Promotion Framework for Sustainability

102-35

Remuneration policies

Pages on PDF
3-4

18-4
18-3-3

18-6 Compensation of Directors of the Board and Audit 18-6-1
and Supervisory Board Members

Website > Investors > Securities Report (only in Japanese)ーWebsite > Investors > Securities Report (only in Japanese)
102-363-1

Process for determining remuneration

3-1

Website > Investors ＞ Management ＞ Management
Plan (Long-term, Medium-term)ー

3-3 Nisshaʼs Value Creation Process

3-3

3-4 Promotion Framework for Sustainability

3-4

20. Internal Control System

19, 2018-3 Directors of the Board and the Board of Directors 18-3-1> Role of the Board of Directors ＞ Policy and Procedures for Appointment/Dismissal of Directors of theBoard, Evaluation of Effectiveness of the Board of Directors, Reasons for Appointment and Board of Directors
Meeting Attendances in FY ended December 2021

102-3719, 20

3-4 Promotion Framework for Sustainability

3-4

20. Internal Control System

19, 20102-32Highest governance bodyʼs role insustainability reporting

3-4 Promotion Framework for Sustainability

3-4

102-33

Communicating critical concerns

3-4 Promotion Framework for Sustainability

3-4

20. Internal Control System

19, 20ー

Stakeholdersʼ involvement in remuner- 18-6 Compensation of Directors of the Board and Audit 18-6-1
ation
and Supervisory Board Members
Website > Investors > Securities Report (only in Japanese)

102-38Annual total compensation ratio

102-39Percentage increase in annual totalcompensation ratioー

5. Stakeholder engagement102-40

List of stakeholder groups

3-7 Nissha Group Stakeholders

3-7-1

102-41

Collective bargaining agreements

11-5 Relationship with Labor Union

11-4

102-42

Identifying and selecting stakeholders

3-7 Nissha Group Stakeholders

3-7-1

102-43

Approach to stakeholder engagement

3-7 Nissha Group Stakeholders

3-7-1

102-44

Key topics and concerns raised

102-45

Entities included in the consolidated
financial statements

Website > Investors > Securities Report (only in Japanese)ー102-46

Defining report content and topic
Boundaries

1-4 Scope of Reporting

1-1

3-5-1 Materiality Identification

3-5-1

3-5-2 Materialities of Nissha Group / KPIs and Action
Items

3-5-2-1

3-5-3 FY2021.12 Initiatives and Achievement Status

3-5-3-1

3-5

20. Internal Control Systemー18-6 Compensation of Directors of the Board and Audit 18-6-1
and Supervisory Board Members
Website > Investors > Securities Report (only in Japanese)

3-4

3-4

Nissha Sustainability Report 2022

GRI Standards

18-3-1

Review of economic, environmental, 3-4 Promotion Framework for Sustainability
and social topics
20. Internal Control System

102-31

Quality Management / Efficiency
and Productivity Improvement

18-3 Directors of the Board and the Board of Directors> Role of the Board of Directors

Identifying and managing economic, 3-4 Promotion Framework for Sustainability
environmental, and social impacts
3-5 Materialities (Key Issues) and KPIs

Effectiveness of risk management
processes

Pages on PDF

Fair Operating
Practices18-4 Nomination and Compensation Committee

Role of highest governance body in 3-1 Nissha Philosophy
setting purpose, values, and strategy
3-2 Sustainability Vision (long-term vision for 2030)

102-27102-29Human Rights

6. Reporting practice19, 20102-47

List of material topics

28-2

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item

Human Rights

Human Resources

Location of Nissha Information Posted

Pages on PDF

102-48

Restatements of information(Not applicable)

102-49Changes in reporting

1-6 Major Changes in Reporting Scope

1-5

102-50

Reporting period

1-4 Period Covered

1-1

102-51

Date of most recent report

1-3 Publication Dates

1-1

102-52

Reporting cycle

1-3 Publication Dates

1-1

102-53

Contact point for questions regarding the report

1-7 Publishing Division and Contact for Inquirie

1-5

102-54Claims of reporting in accordancewith the GRI Standards

102-55

GRI content index

28. GRI Standards Content Index

28-1

102-56External assurance

27. Third Party Verification

27

Fair Operating
Practices

GRI Standards

Disclosure Item

Third Party Verification / GRI
Standards Content Index / ESG Data

Location of Nissha Information Posted

Pages on PDF

103-3

Evaluation of the management approach

3-4 Promotion Framework for Sustainability

3-4

GRI 201: Economic
Performance 2016

201-1

Direct economic value generated
and distributed

Website > Investors > Securities Report (only in Japanese)

ー

201-2

Financial implications and other risks 4-3 Environmental Management System (EMS)
and opportunities due to climate
6. Responses to Climate Change (Addressing the TCFD
changeRecommendations)

4-3
6-1
21-1

21. Risk Management and Compliance

103-1

Explanation of the material topic
and its Boundary

3-5 Materialities (Key Issues) and KPIs

3-5-1

103-2

The management approach and its
components

3-5-1 Materiality Identification
4. Environmental Policy and Management Structures
6. Responses to Climate Change (Addressing the TCFD
Recommendations)
10. Environmental Objectives and Status of Achievement (Nissha Group in Japan)
11-1 Basic Policy on Labor and Human Rights
11-2 Structure
11-3 Initiatives Related to Labor and Human Rights
12-1-1 Human Resources Policy
12-1-2 New Human Resources System
12-1-3 ESG Task Force Initiatives
12-1-4 Talent Management System
12-3-2 Training Systems
12-3-3 Support for Employees' Voluntary Desires toLearn and Grow
12-3-4 Career Planning Support
12-3-6 In-house Training Programs
12-5-1 Safety and Health
13. Initiatives Related to Information Security
15. Trade Management
16-1 Basic Principles
17-1 Quality Management
21. Risk Management and Compliance
23. Business Continuity
24. Tax Principles

3-5-1
4-1
6-1
10-1-1
11-1
11-1
11-3
12-1-112-1-112-1-312-1-412-3-212-3-312-3-312-3-6
12-5-1-1
13-1
15-1
16-1
17-1-1
21-1
23-1
24

ー

Website > Investors > Securities Report (only in Japanese)
201-3

Nissha Sustainability Report 2022

Governance

Economic

Management Approach
GRI 103 : Management Approach 2016

Quality Management / Efficiency
and Productivity Improvement

Defined benefit plan obligations and 12-4-13 Retirement Pay Systemother retirement plans
Website > Investors > Securities Report (only in Japanese)

201-4

Financial assistance received fromgovernment

202-1

Ratios of standard entry level wage
by gender compared to local minimum wage

202-2

Proportion of senior management
hired from the local community

GRI 203：Indirect
Economic Impacts
2016

203-1

Infrastructure investments and services supported

203-2

Significant indirect economic impacts

GRI 204：Procurement Practices 2016

204-1

Proportion of spending on local suppliers

GRI 205：Anti-corruption 2016

205-1

Operations assessed for risks related
to corruption

205-2

Communication and training aboutanti-corruption policies and procedures

205-3

Confirmed incidents of corruption
and actions taken

GRI 202：Market
Presence 2016

12-4-13ー

12-2-1 Nissha Group Employee Composition

12-2-1

21. Risk Management and Compliance

21-1

22. Initiatives Related to Anti-corruption

22

22. Initiatives Related to Anti-corruption

22

28-3

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item

Human Rights

Human Resources

Location of Nissha Information Posted

Pages on PDF

GRI 206：Anti-competitive Behavior
2016

206-1

Legal actions for anti-competitive
behavior, anti-trust, and monopoly
practices(Not applicable)

GRI 207: Tax 2019

207-1

Approach to tax

24. Tax Principles

24

207-2

Tax governance, control, and risk
management

24. Tax Principles

24

207-3

Stakeholder engagement and management of concerns related to tax

24. Tax Principles

207-4

Country-by-country reporting

301-1

Materials used by weight or volume301-2

Recycled input materials used

301-3

Reclaimed products and their packaging materialsReclaimed products
and their packaging materials

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

GRI Standards

Disclosure Item
303-4

GRI 302：Energy
2016

302-1

Energy consumption within the organization

24

5. Impact on the Environment out of Our Business
Operations

GRI 304：Biodiversity
2016

5-1

GRI 305：Emissions
2016
5. Impact on the Environment out of Our Business
Operations

303-5

Water consumption

304-1

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

304-2

Significant impacts of activities,
products, and services on biodiversity

304-3

Habitats protected or restored

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

5-1
7-1

302-3

Energy intensity

7. CO2 Emissions and Reduction Efforts

7-1

302-4

Reduction of energy consumption

5. Impact on the Environment out of Our Business
Operations

5-1

7-1

302-5

Reductions in energy requirements
of products and services

303-1

Interactions with water as a sharedresource

303-2

Management of water discharge-re- 9-6 Prevention of Water Pollution
lated impacts

9-6

303-3

Water withdrawal

5-1

Nissha Sustainability Report 2022

5. Impact on the Environment out of Our Business
Operations

Pages on PDF
5-1

5-1

7. CO2 Emissions and Reduction Efforts

7-1
5-1

Energy indirect (Scope 2) GHG emis- 5. Impact on the Environment out of Our Business
sions
Operations
7. CO2 Emissions and Reduction Efforts

7-1

305-3

Other indirect (Scope 3) GHG emissions

5. Impact on the Environment out of Our Business
Operations

5-1

7. CO2 Emissions and Reduction Efforts

7-1

305-4

GHG emissions intensity

5. Impact on the Environment out of Our Business
Operations

5-1

7. CO2 Emissions and Reduction Efforts

7-1

5. Impact on the Environment out of Our Business
Operations

5-1

7. CO2 Emissions and Reduction Efforts

7-1

305-5

5. Impact on the Environment out of Our Business
Operations

5. Impact on the Environment out of Our Business
Operations

305-2

Energy consumption outside of theorganization

7. CO2 Emissions and Reduction Efforts

GRI 303：Water andEffluents 2018

Location of Nissha Information Posted

9-6

7. CO2 Emissions and Reduction Efforts
302-2

Third Party Verification / GRI
Standards Content Index / ESG Data

9-6 Prevention of Water Pollution

Environmental
GRI 301：Materials
2016

Water discharge

Governance

305-6

Reduction of GHG emissions

Emissions of ozone-depleting substances (ODS)

28-4

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Disclosure Item
305-7

GRI 306：Waste
2020

Environment

Human Rights

Human Resources

Location of Nissha Information Posted

Nitrogen oxides (NOX), sulfur oxides 5. Impact on the Environment out of Our Business(SOX), and other significant air emis- Operations
sions
7. CO2 Emissions and Reduction Efforts

Pages on PDF

Social7-1

GRI 401：Employment 2016

9-8 Prevention of Air Pollution

9-8

Waste generation and significant
waste-related impacts

8-2 Risk Management Related to Waste and Waste
Converted in Valuable Resources

8

306-2

Management of significant
waste-related impacts

8-2 Risk Management Related to Waste and Waste
Converted in Valuable Resources

8

306-3

Waste generated

5. Impact on the Environment out of Our Business
Operations

5-1

8-1 Total Amount of Waste Generated by Nissha Group 8
Waste diverted from disposal

5. Impact on the Environment out of Our Business
Operations

Quality Management / Efficiency
and Productivity Improvement

GRI Standards

5-1

306-1

306-4

Fair Operating
Practices

Disclosure Item

401-1

New employee hires and employee
turnover401-2

Benefits provided to full-time employees that are not provided totemporary or part-time employees

Waste directed to disposal

5. Impact on the Environment out of Our Business
Operations

8-1 Total Amount of Waste Generated by Nissha Group 8
GRI 307：Environmental Compliance
2016

GRI 308：Supplier Environmental
Assessment 2016

307-1

Non-compliance with environmental laws and regulations

308-1

New suppliers that were screenedusing environmental criteria

308-2

Negative environmental impacts inthe supply chain and actions taken

Nissha Sustainability Report 2022

9. Management of Chemical Substances and Environmental Risks

9-1

10. Environmental Objectives and Status of Achievement (Nissha Group in Japan)

10-1-1

16-4 CSR Audit and SAQ

16-2

10. Environmental Objectives and Status of Achievement (Nissha Group in Japan)

10-1-1

16-1 Basic Principles

16-1

16-2 Maintaining Purchasing Related Rules

16-2

16-3 Nissha Group Supply Chain

16-2

16-4 CSR Audit and SAQ

16-2

Location of Nissha Information Posted

12-2-1 Nissha Group Employee Composition

Pages on PDF

12-2-1

401-3

Parental leave

12-4-3 Child-rearing and Family Care Support

12-4-1402-1

Minimum notice periods regarding
operational changes

11-5 Relationship with Labor Union

11-4

GRI 403：Occupational Health and
Safety 2018403-1

Occupational health and safety
management system

12-5-1 Safety and Health12-5-1-1

26. Management System and other Certification Acqui- 26-1
sitions

5-1

5-1

Third Party Verification / GRI
Standards Content Index / ESG Data

GRI 402：Labor/
Management Relations 2016

12-5-1-1

403-2

Hazard identification, risk assessment, and incident investigation

12-5-1 Safety and Health23-3 Initiatives

23-3-1

403-3

Occupational health services

12-5-1 Safety and Health12-5-1-1

403-4

12-5-1 Safety and HealthWorker participation, consultation,and communication on occupational health and safety

12-5-1-1

403-5

Worker training on occupational
health and safety

12-5-1 Safety and Health > Safety and Health Education and Training

12-5-1-2

403-6

Promotion of worker health12-5-2 Health and Productivity Management

12-5-2-1

403-7

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

12-5-1 Safety and Health12-5-1-1

403-8

Workers covered by an occupational
health and safety management system

12-5-1 Safety and Health12-5-1-1

403-9

Work-related injuries

12-5-1 Safety and Health ＞ Occurrence of Occupational Accidents

12-5-1-2

403-10Work-related ill health12-5-1 Safety and Health ＞ Occurrence of Occupational Accidents

12-5-1-2

8-1 Total Amount of Waste Generated by Nissha Group 8
306-5

Governance

28-5

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards
GRI 404：Training
and Education 2016

Disclosure Item

Human Rights

Human Resources

Location of Nissha Information Posted

Pages on PDF

404-1

Average hours of training per year
per employee

12-3-5 Training Records

12-3-3404-2

Programs for upgrading employee
skills and transition assistance programs

12-1-4 Talent Management System

12-1-4

404-3

GRI 405：Diversity
and Equal Opportunity
2016

Environment

405-1

12-2-4 Promotion of Women's Advancement

12-2-312-3 Human Resources Development

12-3-112-4-9 Internal Job Posting System

12-4-912-4-10 Awarding System

12-4-912-4-11 Career Resumption Program

12-4-913-5 Training

13-3

14-2 Major Initiatives ＞ Training

14

15-5 Training

15-3

16-5 Development of Procurement Personnel

16-5

Percentage of employees receiving
regular performance and career development reviews

12-1-5 Fair Evaluation and Treatment

12-1-4

Diversity of governance bodies andemployees

12-2-1 Nissha Group Employee Composition

12-2-1

18-3 Directors of the Board and the Board of Directors> Skills and Diversity Required of Directors of the Board

18-3-2

18-7 Corporate Officers

18-7

12-1-6 Wage Management

12-1-4405-2

Ratio of basic salary and remuneration of women to men

GRI 406：Non-discrimination 2016406-1

Incidents of discrimination and corrective actions taken

GRI 407：Freedomof Association andCollective Bargaining
2016

407-1

Operations and suppliers in which
the right to freedom of associationand collective bargaining may be at
risk

Nissha Sustainability Report 2022

11-5 Relationship with Labor Union

11-4

16-1 Basic Principles

16-1

16-2 Maintaining Purchasing Related Rules

16-2

16-3 Nissha Group Supply Chain

16-2

16-4 CSR Audit and SAQ

16-2

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

GRI Standards
GRI 408：Child Labor
2016

GRI 409：Forced orCompulsory Labor
2016

Disclosure Item
408-1

409-1

Operations and suppliers at significant risk for incidents of child labor

Operations and suppliers at significant risk for incidents of forced orcompulsory labor

GRI 410：Security
Practices 2016

410-1

Security personnel trained in humanrights policies or procedures

GRI 411：Rights ofIndigenous Peoples
2016

411-1

Incidents of violations involving
rights of indigenous peoples

GRI 412：Human
Rights Assessment
2016

412-1

Operations that have been subject
to human rights reviews or impact
assessments

412-2

Employee training on human rights
policies or procedures

412-3

Significant investment agreements
and contracts that include humanrights clauses or that underwent human rights screening

413-1

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

413-2

Operations with significant actualand potential negative impacts on
local communities

GRI 413：Local Communities 2016

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Location of Nissha Information Posted

Pages on PDF

11-1 Basic Policy on Labor and Human Rights

11-1

11-3 Initiatives Related to Labor and Human Rights

11-3

16-1 Basic Principles

16-1

16-2 Maintaining Purchasing Related Rules

16-2

16-3 Nissha Group Supply Chain

16-2

16-4 CSR Audit and SAQ

16-2

11-1 Basic Policy on Labor and Human Rights

11-1

11-3 Initiatives Related to Labor and Human Rights

11-3

16-1 Basic Principles

16-1

16-2 Maintaining Purchasing Related Rules

16-2

16-3 Nissha Group Supply Chain

16-2

16-4 CSR Audit and SAQ

16-2

11-3 Initiatives Related to Labor and Human Rights

11-3

16-4 CSR Audit and SAQ

16-2

28-6

Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards
GRI 414：SupplierSocial Assessment
2016

Environment

Disclosure Item

Location of Nissha Information Posted

414-1

New suppliers that were screenedusing social criteria

414-2

Negative social impacts in the supply 16-1 Basic Principles
chain and actions taken
16-2 Maintaining Purchasing Related Rules

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 of product and service categories

416-2

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

417-1

Requirements for product and service information and labeling

417-2

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

417-3

Incidents of non-compliance concerning marketing communications

GRI 418：Customer
Privacy 2016

418-1

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

GRI 419：Socioeconomic Compliance
2016

419-1

Non-compliance with laws and regulations in the social and economic
area

GRI 417：Marketingand Labeling 2016

Human Rights

Nissha Sustainability Report 2022

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Pages on PDF

16-1
16-2

16-3 Nissha Group Supply Chain

16-2

16-4 CSR Audit and SAQ

16-2

25. Initiatives Related to Conflict Minerals

25

17-1-6 Quality and Safety of Products

17-1-6

28-7

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance

29. ESG Data
The ESG Data is a compilation of quantitative information shown in Nissha Sustainability Report andsome additional information. The data for the five years from FY2017 to FY2021 are collected for eachtheme. In addition, a list of policies, principles and guidelines is posted at the end of this document.

1. Information for FY2017 is for the nine-month period from April to December 2017.

Items

Unit

Boundary

FY2017FY2018FY2019FY2020

FY2021

1,596

1,001

858

778

845

Ink and others

Industrial Materialst

Production basesin JapanMaterials used in manufacturing processes

Devicest

Production basesin Japan

10,12015,522

10,702

12,103

13,729OthersDevicest

Production basesin Japan

4,497

2,064

1,621

1,849

1,589

Product materials

Medical Technologies*1tProduction basesin Japan

n/a

n/a

n/a

n/a

Paper

Others*2t

Production basesin Japan

6,419

6,534

4,348

3,958

4,424

Ink and others

Others*2t

Production basesin Japan

137

139

83

75

84

2. In the boundary, Nissha Co., Ltd. is described as “Nissha" and the entire group companies including Nissha Co., Ltd. is describedas “Nissha Group”. In addition, domestic companies within the "Nissha Group" are referred to as “Nissha Group in Japan”. Individual company names are abbreviated as below, and the grouping of production bases in Japan or overseas are stated accordingly.
• NII: Nitec Industries, Inc.
• NPT: Nitec Precision and Technologies, Inc.

*1. Starting in the fiscal year ended December 2021, we added input data from the domestic Japanese Medical Technologies business.
*2. Posted as "Information and Communication" until Nissha Sustainability Report 2021.

Nissha Group Sustainability
Items

Unit

Boundary

MillionNissha Group in

yen

Japan

FY2017FY2018FY2019

n/a

n/a

n/a

FY2020

FY2021

99

111

3-8 Along with Local Communities
Social contribution expenses

Environment
Items

Unit

Boundary

FY2017FY2018FY2019FY2020Total input (production bases in Japan)tNissha Groupt

Production basesin Japan

25,564
1,546

1,311

1,123

978

1,165

1,212

1,099

841

686

843

PET/acryl film

Industrial Materialst

Production basesin Japan

Solvents

Industrial Materialst

Production basesin JapanNissha Sustainability Report 2022

108,625 118,586 101,398 114,036 127,430
27,853

19,612

20,482

Total input (Overseas production bases)tOverseas
production bases

83,062

90,732

81,786

93,553 104,449

Resin

t

Overseas
production bases

4,439

5,394

1,636

1,290

4,506

Molds and their materialstOverseas
production bases

93

90

85

90

120

Touch sensorstOverseas
production bases

0

1

0

0

0

Paper

t

Overseas
production bases

66,022

77,217

69,63078,391

88,131

CardboardstOverseas
production bases

244

179

1,391

1,752

1,073

AluminumtOverseas
production bases

119

213

140

2,594

2,218

Chemical substancestOverseas
production bases

10,389

6,391

5,204

6,560

6,105

OtherstOverseas
production bases

1,756

367

1,571

1,031

568

FY2021

5. Impact on the Environment out of Our Business Operations
Total input

55

22,981

29-1

Contents /Editorial Policy

Nissha Group
Sustainability

Items
Electricity

Environment

Unit

Boundary

MWhProduction basesin Japanand overseas

EnergyHuman Rights

FY2017FY2018Human Resources

FY2019FY2020Fair Operating
Practices

FY2021

218,104 285,404 274,593 257,464 264,973

Quality Management / Efficiency
and Productivity Improvement

Items

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance

Unit

Boundary

FY2017FY2018FY2019FY2020

FY2021

Scope 1, CO2 emissions

t-CO2

Production basesin Japanand overseas

25,43023,567

26,603

20,85324,196

Scope 2, CO2 emissions

t-CO2

Production basesin Japanand overseas

151,635 161,003 152,399 103,351 101,048

Total

t-CO2

Nissha Group inJapan

48,14918,162

56,796

67,90338,854

Material suppliert-CO2

Nissha Group inJapan

13,095

10,96948,68245,646

18,603

Logistics suppliert-CO2

Nissha Group inJapan

30,851

3,242

4,553

19,72017,766

Employees commuting

t-CO2

Nissha Group in
Japan

1,877

2,423

2,347

2,244

2,204

Employees business trip

t-CO2

Nissha Group in
Japan

1,314

1,528

1,214

293

281

Total

t-CO2

Production basesin Japanand overseas

129,345 184,570 147,266*1 124,204 125,244

Production bases in Japan

t-CO2

Production basesin Japan

93,176 131,653 106,788*1

85,57083,652

Overseas production bases

t-CO2

Overseas
production bases

36,16952,917 40,478*1

38,634

41,592t-CO2/
Millionyen

Production basesin Japanand overseas

0.81

0.85*10.69

0.66

7. CO2 Emissions and Reduction Efforts

Production basesin Japannd overseas

8,894

Thousand m3

Production basesin Japanand overseas

923

Underground water

Thousand m3

Production basesin Japanand overseas

9

10

103

40

46

Industrial water

Thousand m3

Production basesin Japanand overseas

1,679

2,158

1,943

1,725

1,670

Total output (production bases in Japan)t

Production basesin Japan

18,972

21,994

16,437

18,53817,465

Recyclable resources (items sold for recycling)t

Production basesin Japan

6,798

8,735

5,877

6,406

5,743

Recyclable resources (industrial waste)t

Production basesin Japan

12,157

13,23010,537

12,105

11,697

Waste for simple incineration/landfilltProduction basesin Japan

17

29

23

27

25

Total output (Overseas production bases)tOverseas
production bases

238

231

9,156

11,397

13,121

Recyclable resources (items sold for recycling)tOverseas
production bases

n/a

n/a

7,272

8,433

9,838

CO2 emissions basic unit of net sales

Recyclable resources (industrial waste)tOverseas
production bases

n/a

n/a

666

1,369

1,335

Non-recyclable wastetOverseas
production bases

n/a

n/a

1,218

1,595

1,948

*Through FY2019, CO2 emission coefficients were fixed values. However, in FY2020 and beyond, these are derived from data calculated using
market standards for Japan and location standards for overseas areas.
*1. These are derived from data calculated using market standards for Japan and location standards for overseas areas.

Gas

Tap water

Water

Thousand m3

10,4101,252

11,585

1,291

9,085

1,287

10,558

1,249

Scope 3, CO2 emissions

CO2 emissions*The scope of data collection of total waste generated at overseas production bases were expanded from the FY ended December 2019.
VOC

Wastewater

Nissha Sustainability Report 2022t

Production basesin Japanand overseas

1,340

1,069

808

700

826

Thousand m3

Production basesin Japanand overseas

2,240

3,334

3,305

3,033

2,594

Energy consumption

0.89

Total

Thousand GJ

Production basesin Japanand overseas

2,331

3,328

3,266

2,966

3,124

Production bases in Japan

Thousand GJ

Production basesin Japan

1,689

2,372

2,208

1,999

2,040

Overseas production bases

Thousand GJ

Overseas
production bases

642

956

1,058

967

1,084

29-2

Contents /Editorial Policy

Nissha Group
Sustainability

Items

Gas consumption

Boundary

Human Rights

FY20170.0146FY20180.0160

Human Resources

FY20190.0189FY20200.0165

Fair Operating
Practices

FY2021

Quality Management / Efficiency
and Productivity Improvement

Items

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance

Unit

Boundary

FY2017FY2018FY2019FY2020

FY2021SS

mg/l

NPT Himeji
Factory

3

3.7

1.6

1.9

2.6

N-hexanemg/l

NPT Himeji
Factory

0.6

0.6

<0.5

<0.5

<0.5

0.0165Total

MWh

Production basesin Japanand overseas

Production bases in Japan

MWh

Production basesin Japan151,639 213,581 197,029 183,200 182,488

Coppermg/l

NPT Himeji
Factory

0.03

0.14

0.04

0.05

0.02

Overseas production bases

MWhOverseas
production bases

66,46576,51477,56374,264

82,485Zinc

mg/l

NPT Himeji
Factory＜ 0.01＜ 0.01

<0.01

<0.01

<0.01

Total

Thousand m3

Production basesin Japanand overseas

8,894

10,410

11,585

9,085

10,558

Soluble ironmg/l

NPT Himeji
Factory＜ 0.01＜ 0.01

0.02

0.03

0.03

Thousand m3

Production basesin JapanSoluble manganese

mg/l

0.05

0.04

0.04

0.04

4,247

5,769

5,359

4,166

4,865

NPT Himeji
Factory

0.05

Production bases in Japan

Thousand m3

Overseas
production bases

Chromium

mg/l＜ 0.02

<0.02

<0.02

<0.02

4,647

4,641

6,226

4,919

5,694

NPT Himeji
Factory＜ 0.02

Overseas production bases

Nitrogenmg/l

NPT Himeji
Factory

5.4

4.8

8.0

4.2

4.5

kl

Production basesin Japanand overseas

136

Phosphorus

mg/l

NPT Himeji
Factory

0.14

0.05

0.19

0.02

0.03

82

98

97

72

70

Measurements of Wastewater Quality, NPT Kaga Factory-

NPT Kaga Factory

7.5

7.4

7.5

7.5

7.4

56

150

133

151

pH

Final effluent (Average)

54

Final effluent (Average)-

NPT Kaga Factory

7.6

7.7

7.5

7.7

7.7

Final effluent (Average)

mg/l

NPT Kaga Factory

31.5

32.6

21.9

23.4

23.3

Final effluent (Average)

mg/l

NPT Kaga Factory

47.0

56.0

34.0

40.0

35.0

Final effluent (Average)

mg/l

NPT Kaga Factory

35.4

55.3

34.0

33.5

37.7

Final effluent (Average)

mg/l

NPT Kaga Factory

63.0

93.0

47.0

47.0

44.0

Final effluent (Average)

mg/l

NPT Kaga Factory

15.6

28.2

9.1

6.3

6.0

Final effluent (Average)

mg/l

NPT Kaga Factory

26.0

63.0

18.0

23.0

10.0

Final effluent (Average)

mg/l

NPT Kaga Factory

0.5

0.5

0.6

0.6

0.5

Final effluent (Maximum)

mg/l

NPT Kaga Factory

0.5

0.5

0.8

0.9

0.5

Total
Gasoline, diesel, and heavy
oil consumption

Unit

ThouProduction bases
sand GJ/
in JapanMillionand overseasyenEnergy consumption basic
unit of net sales

Electricity consumption

Environment

Production bases in Japankl

Production basesin Japan

Overseas production bases

klOverseas
production bases

218,104 290,095 274,593 257,464 264,973

Phenolmg/l

NPT Himeji
Factory＜ 0.005＜ 0.005<0.005<0.005<0.005

154

246

205

220

8. Waste Management
Recycling and resource reuse rate%

Nissha Group in
Japan

BOD
99.9

99.9

99.9

99.9

99.9

9. Management of Chemical Substances and Environmental Risks

COD

Measurements of Wastewater Quality, NPT Himeji Factory
Discharged waterm3

NPT Himeji
FactorypH-

NPT Himeji
Factory

4,976

4,934

4,655

4,156

4,150

6.8 ／ 8.0 6.9 ／ 7.6 6.9 ／ 7.6 6.8 ／ 7.5 6.9 ／ 7.5

BOD

mg/l

NPT Himeji
Factory

1.4

2.9

2.8

4.0

3.7

COD

mg/l

NPT Himeji
Factory

4.6

4.6

7.3

5.2

4.4

Nissha Sustainability Report 2022

SS

N-hexane

29-3

Contents /Editorial Policy

Nissha Group
Sustainability

Items

Environment

Unit

Boundary

Human Rights

FY2017FY2018Human Resources

FY2019FY2020Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

FY2021

Items

PRTR-designated chemical substances, NII Koka Factory

53 Ethylbenzene

80 Xylene

88 Hexavalent chromium
compounds

296 1,2,4-Trimethylbenzend

300 Toluene

392 N-hexane

Discharge into the atmospherekg

Transferred to industrial
waste processing companieskg

NII Koka Factory

1,500

587

463

286

928

Discharge into the atmospherekg

NII Koka Factory

16,000

9,904

9,937

15,745

10,524

Transferred to industrial
waste processing companieskg

NII Koka Factory

4,200

4,026

4,075

6,431

4,298

Discharge into the atmospherekg

NII Koka Factory

0.1

0.1

0.1

0.1

0.1

Transferred to industrial
waste processing companieskg

NII Koka Factory

0

0

0

0

850*

Discharge into the atmospherekg

NII Koka Factory

2,300

299

265

25

59

Transferred to industrial
waste processing companieskg

NII Koka Factory

1,100

107

95

10

24

Discharge into the atmospherekg

NII Koka Factory

66,00083,927 100,846

61,535 106,873

Transferred to industrial
waste processing companieskg

NII Koka Factory

40,00036,831

5,520

25,13443,652

Discharge into the atmospherekg

NII Koka Factory

5,300

8,371

4,518

601

258

Transferred to industrial
waste processing companieskg

NII Koka Factory

3,200

2,375

2,741

245

105

NII Koka Factory

2,100

1,444

1,211

710

2,273

453 Molybdenum and its
compounds

Third Party Verification / GRI
Standards Content Index / ESG Data

Governance

Unit

Boundary

FY2017FY2018FY2019FY2020

FY2021

Discharge into the atmospherekg

NPT Himeji
Factory

0

0

0

0

0

Transferred to industrial
waste processing companies

kg

NPT Himeji
Factory

0

0

0

0

0

kg

NPT Kaga Factory

n/a

n/a

n/a

n/a

n/a

kg

NPT Kaga Factory

n/a

n/a

n/a

n/a

n/a

Discharge into the atmospherekg

NPT Kaga Factory

0

0

0

0

0

Transferred to industrial
waste processing companies

kg

NPT Kaga Factory

0

0

0

0

0

Discharge into the atmospherekg

NPT Kaga Factory

0

0

0

0

0

Transferred to industrial
waste processing companies

kg

NPT Kaga Factory

0

0

0

0

0

Discharge into the atmospherekg

NPT Kaga Factory

n/a

n/a

n/a

n/a

n/a

Transferred to industrial
waste processing companies

kg

NPT Kaga Factory

n/a

n/a

n/a

n/a

n/a

PRTR-designated chemical substances, NPT Kaga Factory
Discharge into the atmo64 Silver and its compounds sphere(water soluble)
Transferred to industrial
waste processing companies

71 Ferric chloride

272 Water-soluble copper
salts (excluding complex
salt)

453 Molybdenum and its
compounds

10. Environmental Objectives and Status of Achievement (Nissha Group in Japan)
Environmental accidents

NumberNissha Group in
Japan

0

0

0

0

1*

*In FY2021, there was one chemical leak accident at the NII Koka Factory, but it did not have a significant environmental impact.

*The increase in the amount of hexavalent chromium compounds transferred in FY2021 was due to the disposal of materials no longer needed as aresult of the renewal of factory facilities.
PRTR-designated chemical substances, NPT Himeji Factory

71 Ferric chloride

272 Water-soluble copper
salts (excluding complex
salt)Discharge into the atmospherekg

NPT Himeji
Factory

0

0

0

0

0

Transferred to industrial
waste processing companies

kg

NPT Himeji
Factory

0

0

0

0

0

Discharge into the atmospherekg

NPT Himeji
Factory

0

0

0

0

0

Transferred to industrial
waste processing companies

kg

NPT Himeji
Factory

1,857.0

2,023.1

1,352.8

1,820.2

2,677.4

Nissha Sustainability Report 2022

29-4

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Human Rights
Items

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Unit

Boundary

FY2017 FY2018 FY2019 FY2020 FY2021

Human Resources
Unit

Boundary

FY2017FY2018FY2019FY2020Items

FY2021

12-1 Human Resources System

11. Human Rights
Harassment Help Desk number of consultations

NumberNissha Group

11

8

9

8*

12*

*As the Harassment Help Desk (outside the company) and the Hotline have been shared since January 2020, only the number of cases handled by
the internal consultation service is shown in the number of cases handled by the Harassment Help Desk after the FY ended December 2020.

Membership ofLabor Union

Fair Operating
PracticesManagers (excluding directors)

Total

NumberNissha Group in Japan

1,377

1,386

1,308

1,133

1,106

The Nissha Labor Union

NumberNissha Group in Japan

745

765

739

649

ー

The Nitec Industries Labor
Union

NumberNissha Group in Japan

439

436

433

354

ー

The Nissha Printing CommuniNumber
cations Labor Union

Nissha Group in Japan

193

185

136

130

ー

*In January 2021, the Nissha Crew Alliance was organized as the single labor union of the Nissha Group in Japan, led by employees of Nissha Co.,
Ltd., Nitec Industries, Inc. and Nissha Printing Communications, Inc.
Number of reports on strike or lockout

NumberNissha Group in Japan

0

0

0

0

Gap between male and female in terms of base salary

General employees-

Nissha

n/a

n/a

n/a

n/a

100

-

Nissha

n/a

n/a

n/a

n/a

102

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

93

Gap between male and female in terms of remuneration
Managers (excluding directors)

General employees
0MaleFemale

*1

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

99

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

85

*The figures show a comparison of female with a male base salary and compensation set at 100.
*Treatment is the same for male and female. The difference is due to differences in the grade structure due to the distribution of the age structure
between male and female.
*1. Base salary paid to workers plus other payments. Includes bonuses, overtime allowance, commuting allowance, and family allowance, etc.
12-2 Respect for Diversity
Number of locally hired CEO
Number of employees by area
(Japan)Number of employees by area
(Asia)

Number of employees by area
(Europe)Nissha Sustainability Report 2022

NumberNissha Group

8

8

8

8

8

Total

Number

ー

2,351

2,362

2,300

1,988

1,990

Male

Number

ー

1,926

1,930

1,853

1,587

1,574

FemaleNumber

ー

425

432

447

401

416

Total

Number

ー

695

812

720

674

661

Male

Number

ー

353

402

336

310

312

FemaleNumber

ー

342

410

384

364

349

Total

Number

ー

529

551

523

680

698

Male

Number

ー

342

351

346

478

505

FemaleNumber

ー

187

200

177

202

193

29-5

Contents /Editorial Policy

Nissha Group
Sustainability

Items
Total
Number of employees by area
(North America)

Number of employees by area
(Central and South America)

Composition by employment status(Permanent)

Composition by employment status(Temporary)

Composition of Directors of the
Board

Composition of corporate officers,
excluding concurrently serving as
Directors of the Board

Composition of Nissha fellows

Composition of managerial staff

Composition of employees

Nissha Sustainability Report 2022

Environment

Human Rights

Human Resources

Unit

Boundary

Number

ー

1,000

1,160

1,577

1,509

1,539

Fair Operating
Practices

FY2017 FY2018 FY2019 FY2020 FY2021

Male

Number

ー

630

712

918

841

873

FemaleNumber

ー

370

448

659

668

666

Total

Number

ー

747

959

598

539

521

Male

Number

ー

346

437

239

216

206

Quality Management / Efficiency
and Productivity Improvement

Items
Average
Average age

Average years of employment

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

Unit

Boundary

FY2017 FY2018 FY2019 FY2020 FY2021

Age

Nissha

40.4

40.7

39.8

41.5

42.2

Male

Age

Nissha

41.8

42.1

42.9

43.0

43.8

FemaleAge

Nissha

35.9

36.5

36.7

37.3

37.8

AverageYear

Nissha

13.3

13.5

13.2

14.4

14.3

Male

Year

Nissha

14.1

14.5

15.3

15.4

15.6

FemaleNumber

ー

401

522

359

323

315

FemaleYear

Nissha

10.7

10.7

11.0

11.5

10.8

Total

NumberNissha Group

5,322

5,844

5,718

5,390

5,409

Total

NumberNissha

2

4

2

0

2

Male

NumberNissha Group

3,597

3,832

3,692

3,432

3,470

Male

NumberNissha

1

1

0

0

0

Composition by age (18-19)

FemaleNumberNissha Group

1,725

2,012

2,026

1,958

1,939

FemaleNumberNissha

1

3

2

0

2

Total

NumberNissha Group

3,232

2,325

1,741

2,012

1,443

Total

NumberNissha

118

125

116

94

82
42

Male

NumberNissha Group

2,416

1,666

1,209

1,429

866

Male

NumberNissha

64

71

63

54

FemaleNumberNissha Group

816

659

532

583

577

FemaleNumberNissha

54

54

53

40

40

Total

NumberNissha

8

9

9

9

9

Total

NumberNissha

271

267

246

217

217

Male

NumberNissha

7

7

8

8

8

FemaleNumberNissha

1

1

1

1

1

Total

NumberNissha

15

12

12

11

12

Male

NumberNissha

15

12

12

11

12

Composition by age (20-29)

Composition by age (30-39)

Composition by age (40-49)

Male

NumberNissha

197

189

164

133

135

FemaleNumberNissha

74

78

82

84

82

Total

NumberNissha

269

275

281

262

269

Male

NumberNissha

220

221

225

214

218

FemaleNumberNissha

0

0

0

0

0

FemaleNumberNissha

49

54

56

48

51

Total

NumberNissha

1

1

1

2

2

Total

NumberNissha

128

144

172

145

155

Male

NumberNissha

1

1

1

2

2

Male

NumberNissha

118

130

156

129

134

Composition by age (50-59)

FemaleNumberNissha

0

0

0

0

0

FemaleNumberNissha

10

14

16

16

21

Total

NumberNissha

174

172

172

153

166

Total

NumberNissha

3

4

2

2

6
5

Male

NumberNissha

165

161

162

145

157

Male

NumberNissha3

4

1

1

FemaleNumberNissha

9

11

10

8

9

FemaleNumberNissha

0

0

1

1

1

Total

NumberNissha

791

819

819

720

731

Total

NumberNissha Group

5,322

5,844

5,718

5,390

5,409

Male

NumberNissha

603

616

609

531

534

FemaleNumberNissha

188

203

210

189

197

Composition by age (over 60)

Number of employees

Male

NumberNissha Group

3,597

3,832

3,692

3,432

3,470

FemaleNumberNissha Group

1,725

2,012

2,026

1,958

1,939

29-6

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Male

Number Nissha Group in Japan

Items

Composition of managerial staff

Unit

Boundary

Human Rights

Human Resources

n/a

n/a

339

289

Number Nissha Group in Japan

n/a

n/a

15

13

16

Number Nissha Group in Japan

n/a

n/a

354

302

320

Number Nissha Group in Japan

n/a

n/a

87

94

94

Of which foreign
employees
Percentage of persons with disabilities employed

Training hours per employee

Average
Reinstatement rate after childrearing leave

Retention rate after child-rearing
leave (1 year)

Number Nissha Group in Japan%

Nissha

n/a

n/a

2.13

2

2.18

2.38

2
2.11

2.12

Number of employees who usedfamily care leave

Total

Hours

Nissha Group in Japan 19,765 26,850 22,265 26,337 42,426

Male

Hours

Nissha Group in Japan 14,204 19,573 17,768 19,092 28,928

Number of employees who used

FemaleHours

Nissha Group in Japan

5,561

7,277

4,497

shorter hours for family care

Average

Hours

Nissha Group in Japan

8.4

11.4

9.7

13.1

18.2

Male

Hours

Nissha Group in Japan

7.4

10.2

9.6

11.8

16.4

Number of employees who used

FemaleHours

Nissha Group in Japan

13.1

16.8

10.0

17.9

24.0

days off for family care

7,245 13,498*From FY2019 onward, temporary employees are included in the total.
12-4 Employee Engagement

Number of employees who used

Average days of annual paid leave used

Days

Nissha Group in Japan

10.2

11.0

12.2

11.4

11.5

Average percentage of annual paid leave used%

Nissha Group in Japan

55.9

60.4

65.9

61.4

60.3

Total

Number Nissha Group in Japan

47

59

61

69

67

Male

Number Nissha Group in Japan

7

14

18

19

21

FemaleNumber Nissha Group in Japan

40

45

43

50

46

Total

Number Nissha Group in Japan

84

89

97

95

89

Male

Number Nissha Group in Japan

9

8

7

2

2

Number of employees who usedchild-rearing leave

Number of employees who worked
shorter hours for child-rearing

Number of employees who tookdays off for child nursing

Nissha Sustainability Report 2022

FemaleNumber Nissha Group in Japan

75

81

90

93

87

Total

Number Nissha Group in Japan

129

145

157

120

108

Male

Number Nissha Group in Japan

62

67

79

56

49

FemaleNumber Nissha Group in Japan

67

78

78

64

59

outpatient sick leave system

Third Party Verification / GRI
Standards Content Index / ESG Data

Unit

Boundary

FY2017 FY2018 FY2019 FY2020 FY2021%

Nissha Group in Japan

100

100

96.8

100

97.1

Male

%

Nissha Group in Japan

100

100

100

100

100

%

Nissha Group in Japan

100

100

95.0

100

95.6

Average%Nissha Group in Japan

97.3

96.3

93.5

90.0

88.5

Male

%

Nissha Group in Japan

88.8

83.3

100

92.0

83.3

%

91.3

Nissha Group in Japan

100

100

90.0

88.6

Total

Number Nissha Group in Japan

1

1

4

1

0

Male

Number Nissha Group in Japan

0

1

3

1

0

FemaleNumber Nissha Group in Japan

1

0

1

0

0

Total

Number Nissha Group in Japan

1

1

1

0

0

Male

Number Nissha Group in Japan

0

0

0

0

0

FemaleNumber Nissha Group in Japan

1

1

1

0

0

Total

Number Nissha Group in Japan

16

16

17

15

6

Male

Number Nissha Group in Japan

9

8

12

8

5

FemaleNumber Nissha Group in Japan

7

8

5

7

1

Total

Number Nissha Group in Japan

3

2

3

4

6

Male

Number Nissha Group in Japan

2

1

1

2

3

FemaleNumber of internal job posting

Successful applicants (transferees)

GovernanceFemaleFemale212-3 Human Resources Development

Annual training hours

Items

304

Total

employees

Quality Management / Efficiency
and Productivity Improvement

FY2017 FY2018 FY2019 FY2020 FY2021

FemaleOf which mid-carrier

Fair Operating
Practices

Number Nissha Group in Japan

1

1

2

2

3

Number Nissha Group in Japan

0

15

9

0

15

Total

Number Nissha Group in Japan

n/a

3

5

n/a

7

Male

Number Nissha Group in Japan

n/a

2

4

n/a

6

FemaleNumber Nissha Group in Japan

n/a

1

1

n/a

1

29-7

Contents /Editorial Policy

Nissha Group
Sustainability

Items

Environment

Unit
CEO's Award (Companywide)
CEO's Award (Group
Companies)

Number of award winners

BU Headʼs Award,

NumberBoundary
Nissha Group

Human Rights

Human Resources

n/a

n/a

n/a

n/a

0

NumberNissha Group

n/a

n/a

n/a

n/a

Unit

Third Party Verification / GRI
Standards Content Index / ESG Data

Boundary

FY2017 FY2018 FY2019 FY2020 FY2021

Nissha Group in Japan
Uterus cancer screening rate%10

(held on a biennial

46.7

47.9

49.4

60.3

66.7

60.6

61.5

57.3

81.1

74.2

Nissha Group in Japan
Breast cancer screening rate

n/a

n/a

n/a

n/a

35

Synergy Award

NumberNissha Group

n/a

n/a

n/a

n/a

32

New Hope Award

NumberNissha Group

n/a

n/a

n/a

n/a

13

NumberNissha Group

105

220

111

111

n/a

*In FY2021, the award system was revised and the Nissha People Award was abolished, while other awards were newly established
Subscription rate in employee stock ownership plan

Items

Governancebasis)

Nissha Group

Nissha People Award

Quality Management / Efficiency
and Productivity Improvement

FY2017 FY2018 FY2019 FY2020 FY2021

NumberDirectorʼs Special Award

Fair Operating
Practices%

Nissha Group in Japan

24.5

24.8

26.6

26.0

27.5

%

(held on a biennial
basis)

Stress check implementation rate%

Nissha Group in Japan

99.96

100

100

100

100

Specific health guidance implementation rate%

Nissha Group in Japan

87.0

92.6

97.0

96.2

99.0

Smoking rate*%

Nissha Group in Japan

34.2

30.7

29.3

27.8

28.5

Obesity rate*%

Nissha Group in Japan

22.2

24.2

24.1

23.7

29.7

*Excluding Kaga Factory and Tokyo Division Headquarters until the fiscal year ended December 2020.

12-5 Safety and Health of Employees
Frequency of work-related accidents-

Nissha Group in Japan

1.45

0.84

0.49

0.98

1.48

Severity of work-related accidents-

Nissha Group in Japan

0.01

0.01

0.00

0.01

0.05

Fair Operating Practices

Fatal accidents（employee fatalities due to accidents at work)

Number Nissha Group in Japan

0

0

0

0

0

Number of Work-related Accidents

NumberNissha Group

67

56

59

48

53

Items

Number of Work-related Accidents (Japan)

Number

ー

32

25

13

15

15

16. Partnership with Our Suppliers

Number

ー

5

6

2

3

7

Number

ー

14

11

21

10

14

Number

ー

3

5

11

2

2

Number of Work-related Accidents (Europe)

Number

ー

14

9

12

19

17

Number of Work-related Accidents (Asia)

Number

ー

4

3

2

2

5

Regular health checkup rate%

Nissha Group in Japan

100

100

100

98.8

99.7

Detailed checkup rate after regular health checkup%

Nissha Group in Japan

49.8

42.6

37.8

34.7

51.7

100

100

100

99.8

99.7

4 or more days of leave
Number of Work-related Accidents (North America)
Number of Work-related Accidents (Central and SouthAmerica)Nissha Group in Japan

Specific health checkup rate%

Lung cancer screening rate%

Nissha Group in Japan

99.1

92.0

98.7

99.4

100

Stomach cancer screening rate%

Nissha Group in Japan

93.2

83.3

99.3

92.4

94.0

Colorectal cancer screening rate

Nissha Sustainability Report 2022%

(40 years or older)

Nissha Group in Japan

93.8

87.9

95.6

96.8

96.8

Unit

Boundary

Number of CSR audits conducted for important or new
suppliers

NumberNissha Group in Japan

4

0

1

0

0

Number of CSR audits conducted for important or new
suppliers (cumulative)

NumberNissha Group in Japan

18

18

19

19

19

Total

NumberNissha Group in Japan

183

183

187

187

187

Related to labor andhuman rights

NumberNissha Group in Japan

84

84

88

88

88

Related to safety andhealthNumberNissha Group in Japan

53

53

53

53

53

Related to theenvironment

NumberNissha Group in Japan

29

29

29

29

29

Related to ethics

NumberNissha Group in Japan

12

12

12

12

12

Management system

NumberNissha Group in Japan

5

5

5

5

5

Number of findings pointed out at
CSR audit for suppliers (cumulative)

FY2017 FY2018 FY2019 FY2020 FY2021

29-8

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Human Rights

Human Resources

Fair Operating
Practices

Quality Management, Efficiency and Productivity Improvement
Items

Unit

Boundary

FY2017FY2018FY2019FY2020

FY2021

17-1 Quality Management
Number of serious accident that conflict with laws or regulations as a result of flaws in our products and services
Fines due to a serious accident that conflict with laws or
regulations as a result of flaws in our products and services

NumberNissha Groupin Japan

0

0

0

0

0

Japanese Yen

Nissha Groupin Japan

0

0

0

0

0

Items

Total
compensation

Compensation
by category (Basesalary)Governance
Items

Unit

Boundary FY2017

FY2018FY2019FY2020

FY2021

18. Corporate GovernanceDirectors of the Board

NumberNissha

8

9

9

9

9

Independent Outside Director of the Board

NumberNissha

4

4

4

4

4

Female Directors of the Board

NumberNissha

1

1

1

1

1

Foreign national Directors of the Board

NumberNissha

0

0

1

1

1

Audit and Supervisory Board Members

NumberNissha

4

4

4

4

4

Independent Audit and Supervisory Board Member

NumberNissha

2

2

2

2

2

Female Audit and Supervisory Board Members

NumberNissha

0

0

0

0

0

Corporate Officers

NumberNissha

15

12

12

12

12

Female Corporate Officers

NumberNissha

0

0

0

0

0

Foreign national Corporate Officers

NumberNissha

2

2

2

2

2

*The number of Directors of the Board, Audit and Supervisory Board Members, and Corporate Officers are as of the date of the Ordinary General
Meeting of Shareholders for the relevant fiscal year.

Compensation
by category(Bonuses)

Governance

Unit

Third Party Verification / GRI
Standards Content Index / ESG Data

Boundary FY2017

FY2018FY2019FY2020

FY2021

183

252

255

226

328

Nissha

21

28

28

26

28

Million yen

Nissha

32

48

50

46

53

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

Nissha

112

168

174

151

169

Audit and Supervisory Board Members(Excluding Independent Audit and Supervisory
Board Members)

Million yen

Nissha

21

28

28

26

28

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Million yen

Nissha

32

48

50

46

53

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

Nissha

48

60

55

52

113

Audit and Supervisory Board Members(Excluding Independent Audit and Supervisory
Board Members)

Million yen

Nissha

n/a

n/a

n/a

n/a

n/a

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Million yen

Nissha

n/a

n/a

n/a

n/a

n/a

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

NisshaMillion yen

Nissha

n/a

n/a

n/a

n/a

n/a

Million yen

Nissha

n/a

n/a

n/a

n/a

n/a

Directors of the Board (Excluding Independent
Outside Directors of the Board)

NumberNissha

4

6

5

5

7

Audit and Supervisory Board Members(Excluding Independent Audit and Supervisory
Board Members)

NumberNissha

2

2

2

3

2

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

NumberNissha

6

7

8

6

6

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

NisshaAudit and Supervisory Board Members(Excluding Independent Audit and Supervisory
Board Members)

Million yen

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Compensation by Audit and Supervisory Board Members
category (Stock(Excluding Independent Audit and Supervisory
Board Members)
compensation,etc.)
Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Number ofmembers subject
to aggregation of
remuneration andetc.

Nissha Sustainability Report 2022

Quality Management / Efficiency
and Productivity Improvement

22

23

25

22

45

29-9

Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Items

Unit

Boundary

NumberNissha Group

Human Rights

Human Resources

FY2017FY2018FY2019FY2020

FY2021

20

22

9

12

7

Fair Operating
Practices

Quality Management / Efficiency
and Productivity Improvement

Governance

Third Party Verification / GRI
Standards Content Index / ESG Data

List of policies, principles and guidelines

21. Risk Management and Compliance
Hotline number of reports

Title

Sustainability Report 2022・Web site

*The Hotline is a whistle-blowing and other consultation service for inappropriate, illegal or unethical behavior by organizations or individuals, and is
not limited to harassment consultation.

Social Contribution Policy

3-8 Along with Local Communities

26. Management System and other Certification Acquisitions

Pages on PDF
3-8-1

Enviroment Policy and Principles

4. Environmental Policy and Management Structures

4-1

ISO9001 acquisition site

Number of sites

Nissha Group

26

24

24

29

25

Basic Policy on Labor and Human Rights

11. Human Rights

11-1

ISO13485 acquisition site

Number of sites

Nissha Group

8

8

10

10

10

Human Resources Policy

12-1 Human Resources System

12-1-1

ISO22716 acquisition site

Number of sites

Nissha Group

0

0

0

1

1

Occupational Safety and Health Policy and Principles

12-5-1 Safety and Health12-5-1-1

12-5-2 Health and Productivity Management

12-5-2-1

ISO/TS16949・IATF16949 acquisition site

Number of sites

Nissha Group

5

6

8

9

10

Health and Productivity Management Policy

ISO14001 acquisition site

Number of sites

Nissha Group

12

12

13

17

17

Information Security Policy and Principles

13. Initiatives Related to Information Security

13-1

ISO50001 acquisition site

Number of sites

Nissha Group

2

2

2

5

4

Trade Management Policy and Principles

15. Trade Management

15-1

OHSAS18001・ISO45001 acquisition site

Number of sites

Nissha Group

2

2

3

3

1

Purchasing Principles

16. Partnership with Our Suppliers

16-1

ISO27001 acquisition site

Number of sites

Nissha Group

15

13

11

17

18

Quality Policy / Nissha Quality Way

17-1 Quality Management

17-1-1FSC COC acquisition site

Number of sites

Nissha Group

9

7

4

5

10

Corporate Governance Policy

Website About > Corporate Governanceー

PEFC acquisition site

Number of sites

Nissha Group2

Risk Management Policy

21. Risk Management and Compliance

21-1

21. Risk Management and Compliance

21-2

n/a

n/a

n/a

n/a

EN15593acquisition site

Number of sites

Nissha Group

0

0

1

1

1

Corporate Ethics and Compliance Guidelines and Principles

EC93/42/EEC acquisition site

Number of sites

Nissha Group

2

2

2

2

2

Nissha Group Anti-Corruption Guidelines

22. Initiatives Related to Anti-corruption

22

Business Continuity Plans Plicy and Principles

23. Business Continuity

23-1

Tax Principles

24. Tax Principles

24

Basic Approach to Responsible Mineral Procurement

25. Initiatives Related to Conflict Minerals

25

Nissha Sustainability Report 2022

29-10