Environment
Contents /Editorial Policy

Nissha Group
Sustainability

SocialThird Party
Verification

Environment

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Table of Contents
Table of Contents / Editorial Policy
Editorial Policy

Social1

Governance

Human Rights
Human Rights

Nissha Group Sustainability

Governance13

CEO Message

2

Nissha Philosophy

3-1

Human Resources System

14

Sustainability Vision

3-2

Respect for Diversity

15

Promotion Framework for Sustainability

3-3

Human Resources Development

16

Materialities (Key Issues) and KPIs

3-4

Employee Engagement

17

Initiatives in which Nissha Participate and External
Evaluation

3-5

Safety and Health18

Nissha Group Stakeholders

3-6

Health and Productivity Management

19

Human Resources

Fair Operating Practices / Local Communities

EnvironmentIntellectual Property

20

Environmental Policy and Management Structures

4

Partnership with Our Suppliers

21

Impact on the Environment out of Our Business
Operations

5

Along with Local Communities

22

Responding to Climate Change(Addressing the TCFD Recommendations)

6

Quality Management /Efficiency and Productivity Improvement

CO2 Emissions and Reduction Efforts

7

Quality Management

23

Third Party Verification

8

Efficiency and Productivity Improvement

24

Waste Management

9

Management of Chemical Substancesand Environmental Risks

10

Water Resources

11

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

12

Nissha Sustainability Report 2023

Corporate Governance25

Initiatives of Internal Audit Office

26

Internal Control System

27

Risk Management and Compliance

28

Information Security

29

Trade Management30

Anti-corruption

31

Business Continuity

32

Tax Principle

33

Responsible Mineral Procurement

34

Management System and Other Certification
Acquisitions

35

GRI Standards Content Index / ESG Data
GRI Standards Content Index

36

ESG Data

37

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 2023 covers our initiatives and performance in the fiscal year ended December
2022 (January–December 2022), following the editorial policy given below.

The Role of Nissha Sustainability Report

1-2

Period Covered

From January 2022 to December 2022

1-3

Publication Dates

Current issue: July 2023 for Japanese, August 2023 for English
Last issue: June 2022 for Japanese, August 2022 for English
Next issue: June 2024 for Japanese, August 2024 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.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsMajor 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 PMX Technologies,S.A. de C.V.

Industrial Materials

Nissha Medical Technologies

Medical Technologies

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 2023

Human
Resources

Fair Operating Practices/ Local Communities

1-6

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 Promotion
Contact: Website Contact
TEL: +81 75 811 8111

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Environment
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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

2. CEO Message
Nissha Group is a forward thinking global company. The Missionof Nissha Group is to enrich peopleʼs lives by creating and developing technology into economic and social value through thediverse capabilities, passion, and leadership of the global Nissha
Group. We are expanding three businesses: Industrial Materials,
Devices, and Medical Technologies. In addition, we are also developing various businesses, such as Information and Communication, and Pharmaceutical and Cosmetics.
The Group views sustainability as “initiatives for sustainable growthand development for both the company and society.” Based on
this view, we consider social issues to be business opportunities. We

NISSHAの成長•発展

社会の成長•発展

Sustai nable g rowthof N i ssha

Sustai nable
developmentof society

ヽ
事業機会の創出

Creating business opportunities
リスクの低減R isk reduction
経営基盤の強化Strengt hening management fo undations
ガバナンスの推進

Cor porate governanceNissha Sustainability Report 2023

strive not only to leverage our strengths to provide products andservices that help solve these issues on an ongoing basis, but also tostrengthen the management foundation underpinning our businessactivities, reduce risks that could hamper business continuance, andpromote governance to ensure these are all carried out appropriately. These activities will create the economic and social values statedin our Mission, allowing us to enrich peopleʼs lives.
The Group has set out where it wants to be in terms of management 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 contribute to solving social issues in the priority
markets of medical, mobility, sustainable materials and IT equipment, and to achieve a 30% reduction in total CO2 emissions in
2030 (versus 2020) with a view to carbon-neutral by 2050.
To realize our Sustainability Vision, it is imperative that we continue
to provide value to society through our transactions with our customers. Our employees around the world who share our Mission
are our driving force. In order to create value beyond conventional
thinking amidst a drastically changing market environment, weare promoting diversity in various aspects, cooperating acrosscountries, businesses, and generations, and creating an inclusive
organization in which diverse human resources can thrive. We will
also strive to increase employee engagement by developing humanresources and fostering a corporate culture that enables each andevery employee to demonstrate his or her strengths with passion.
We look forward to your continued guidance and encouragement.

July 2023
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.

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.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 Mission ̶ ideals held in high regard ̶ into Nissha Philosophy
that is greatly valued.

3-2

Sustainability Vision (long-term vision for 2030)

Nissha views sustainability as “initiatives for sustainable growth and development for both the company and society.” We believe that solving social
issues, which are primal needs, will support social development and lead to corporate growth.
Throughout our 90-plus year history, we have grown by evolving and expanding our core technologies and reorganizing 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 evaluatedthe added value that can be created through our core technologies. Based on this analysis, we have positioned Medical, Mobility, and Sustainable
Materials as our growth areas.
Sustainability Vision(Long-term vision for 2030)

With integration and orchestration of the diverse capabilities of our people and ourtechnologies, we will contribute to solving global social issues in the priority markets ofmedical, mobility, and sustainable materials, and realize the enrichment of people's lives.

Social value
Solve social issues through business activities● Solve medical issues, realize safe andcomfortable mobility, and contribute toa circular society● Reduce 30% of total CO emissions, in view
2of carbon-neutral by 2050 (compared to2020)●■ Mission
Economic value

We realize the enrichment of peopleʼs lives by●

Aim for JPY 300 billion of net sales（including JPY 150 billion in medical business）

creating technology and developing it●

into economic and social value through the diverse capabilities,

ROE 15%

passion, and leadership of the global Nissha Group.
Mobility

Sustainable Materials

IT Devices

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 (consultation andtreatment)• 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

Contribute to solving social issues
through our capabilities cultivatedfor IT devices

MedicalNissha Sustainability Report 2023

• Penetrate IT technology into society
through advancement of digital transformation

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Promotion Framework for Sustainability

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 ESG Promotion) as the Vice-Chair. This committee is composedof business 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 humanresources and developing global and management human resources, Respect for human rights,
and Responding to climate change. These are considered to be particularly important from an ESG
perspective, and the 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 2022, we held
one Sustainability Committee meeting and two Progress Review Meetings.

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Materialities (Key Issues) and KPIs

3-4-1 Materiality Identification

Fair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

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 customer s,shareholders, investors, and other stakeholders regarding the social andmanagement issues identified in Step 1, while analyzing and prioritizing
on two axes: "importance to society and stakeholders” (considering
SDGs, external evaluation, etc.) and "importance to Nissha".

STEP3
Verify validity

Examine the validity of the priorities via inter views conducted withbusiness divisions involved in the Sustainability Committee, ESG task
force and other organizations.

STEP4
Establish
materialities, KPIs,
and action items

Based on Steps 1 to 3, materialities are identified through deliberations
and resolutions by the Board of Directors. In addition, business divisions,organizations, and the ESG task force incorporate strateg y items,
KPIs, and action items which are then approved by the Sustainability
Committee.

To realize 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 reversecalculated 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 twoaxes of importance to society and stakeholders, and importance to Nissha. In addition, we holddialogues with stakeholders including customers, shareholders and investors, and include that
insights 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
through deliberations and resolutions by the Board of Directors.

Governance*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

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Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

The Nissha Group is considering environmental changes that can potentially impact our businessactivities. We identify particularly important items for the realization of the Nissha Group
Sustainability Vision as material issues and review these items once a year.

Evaluated and identified environmental and social risks that impede business continuity in aiming toachieve Sustainability Vision
Materialities■ Creating Business Opportunities

Strategy Items(Scenario for achieving materialities)

Strategy Items

Expansion of business for Medical
Devices / Healthcare market

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

Expansion of business for Mobility
marketPromotion of circular
economy (Sustainable
Materials)

Expansion of business for Sustainable Materials market(FY2023)

RelatedSDGs• Contribution to medical carecentered on minimally inva sive
(heart disease) and acute care fields

Net sales of Mobility segment• Providing mobility products that
contribute to safety, comfort, andreduction of environmental impact

Net sales of Sustainable
Materials segment(FY2023)

Reduction of labor and humanrights risks• Number of child labor andforced labor cases at primary
suppliers in areas* with highlabor and human rights risks :0

Responding toclimate change

Realization of Sustainability
Vision (Reduction of CO2
emissions)• Reduction of total CO2
emissions -9% (compared to
2020)

Providing responsible
products and services• Maintain and expand quality
management system inaccordance with our businessstrategy• Improvement of qualit ya ssurance levels by incorporating qualit y-oriented
designing• Fostering and improving thequality mindset• Number of serious quality
incidents: 0

Sustainableprocurement

Establishment andoperationalization of
stable procurement• 100% implementation rateof risk reduction measures for
major components

Net sales of Medical Technologies business

Risk Reduction

Creating Business Opportunities

Solve medical
issues(Medical devices)

KPIs and Action Items

KPIs and Action Items

Respect for humanrightsIdentified based on important social issues (needs) in the priority markets as stipulated in
Sustainability Vision(Scenario for achieving materialities)

GRI Standards Content
Index / ESG Data

■ Risk Reduction

3-4-2 Materialities of Nissha Group / KPIs and Action Items

Materialities

Governance

Related
SDGs• Promotion of circular economy• Solving marine plastic pollution issues• Contribution to improving resource
utilization efficiency• Biodiversity conservation considerations* Risk areas as defined by the International Labour Organization: Central and South America, Southeast Asia, and China

Nissha Sustainability Report 2023

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Identified major business foundation elements in the quest for realizing our Sustainability Vision andaccelerating business activities

Strengthening Management Foundation

Utilizing diverse
human resources anddeveloping global andmanagement humanresources

Strategy Items(Scenario for achieving materialities)

Promote activities for female
employee

Enhancement of trainings for
management / strategic humanresources, and rotation

Efficiency andproductivity
improvement

Improve efficiency andproductivity by digitalization ofvalue creation processes

KPIs and Action Items(FY2023)• Female manager ratio
Global consolidated: 21%
Nissha non-consolidated:
8%• Selection rate ofleader candidates
Nissha non-consolidated:
36%• Reduction of working hours
by automation and efficiency
tools such as RPA (compared
to 2020) by 100,000 hours/ yearFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Boundaries of Materialities■ Strengthening Management Foundation / Corporate GovernanceMaterialities

Governance

RelatedSDGs

Materialities

Boundaries
Inside Nissha Group

Outside Nissha Group

Respect for human rights●●

Responding to climate change●●

Providing responsible products and services●●

Sustainable procurement●●

Utilizing diverse human resources and developing global
and management human resources●

Efficiency and productivity improvement●

Creating technologies to achieve business strategies●

Improving the effectiveness of the Board of Directors
Advancement of global governance●• Conduct training to improve
AI/DX education and IT
literacy: 20 subjects/year

Corporate Governance

Creating technologies
to achieve businessstrategies

Create a product platforms
aimed at increasing
development efficiency inpriority markets• Build product platforms:
3 platforms/year

Improving theeffectiveness of theBoard of Directors

Upgrade systems related tocorporate governance andgroup governance• Improve the evaluationof the effectiveness of
the Board of Directors(compared to previous year)

Advancement of
global governanceNissha Sustainability Report 2023

• Percentage of actions on
the internal control checklist
that were implemented:
100%

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Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Materialities■ Creating Business Opportunities

Solve medical issues(Medical devices)

Strategy Items

KPIs and Action
Items (FY2023)

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

Net sales of Medical
Technologies
business○

Net sales of Mobility
segment△(Scenario for achieving materialities)• Contribution to medical care centered onminimally invasive (heart disease) and acutecare fields

Contribute to the safety andcomfort of transportationand logistics, and the
reduction of environmental
impact (Mobility)
Promotion of circular
economy (Sustainable
Materials)

Expansion of business for Mobility market• Providing mobility products that contributeto safety, comfort, and reduction ofenvironmental impact

Expansion of business for the sustainable
materials market• Promotion of Circular Economy

Fair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Risk Reduction

3-4-3 FY2022 Initiatives and Achievement Status

Materialities

GovernanceNet sales of
Sustainable
Materials segment○

Strategy Items(Scenario for achieving materialities)

KPIs and Action Items(FY2023)

Achievement
Status*1

Initiatives in FY2022

Respect forhuman rights

Reduction of labor and humanrights risks• Number of child laborand forced labor casesof primary suppliers inareas*2 with high laborand human rights risks : 0○• Conducted a survey of target
suppliers using the CSR survey
fo r m, all sup p li er s s co re d
above the threshold, and nouse of child labor or forcedlabor was foundResponding toclimate change

Achievement of Sustainability
Vision (reduction of CO2
emissions)• Reduction of total
CO2 emissions -9%(compared to 2020)○• Promoted switch to renewableelectricity at domestic andoverseas production bases andpromote energy conservation
policies• Continued efforts to identify
Scope 3 emissions

Providingresponsible
medicalproducts andservices

Establishment of management
systems for quality and safetyof products and services• Continuation andexpansion of ISO 13485
certification (number ofcertifications obtained
and maintained asplanned)△Strengthening the legal
compliance system bythoroughly ensuring that
employees understandmedical-related laws andregulation• Continuous
implementationof education for
management and all
employees• Number of bases that acquired
ISO13485 certification was asplanned.
• Although training for all
employees progressed asplanned, we failed to complete
training for management.
• Number of violations of laws
and regulations: 0

Establishment andoperationalization of stableprocurement• 100% implementation ofrisk reduction measures
for major componentsthat need to be addressed(number of risk reduction
measures implemented/
number of major
components)○• Investigated the stateof implementation of
procurement risk reduction
measures for key components
and confirmed the state ofrisks among key components
for which reduction measures
have not been implemented.

• Solving marine plastic pollution issues• Contribution to improving resource utilization
efficiency* This shows the level of achievement of net sales plans for each segment in FY2022.

Sustainableprocurement• Compliance with laws
and regulations related
to information disclosure(Pharmaceutical
Machinery Law
Enforcement
Regulations, Appropriate
Advertising Standards for
Pharmaceuticals, etc.)*1. 〇 means achieved, △ means partially achieved, and × means not achieved.
*2. Risk areas as defined by the International Labour Organization: Central and South America, Southeast Asia, and China

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Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Strengthening Management Foundation / Corporate GovernanceMaterialities

Strategy Items(Scenario for achieving materialities)

KPIs and Action Items(FY2023)

Achievement
Status*△• Systematically select female
leaders and promote female
employees to management
positions. Women's
leadership development
was also implemented atoverseas group companies.
• Nissha Academy offeredadvanced level courses.

○• Make progress in various
productivity improvement
initiatives and achievetargets.
• Achieved DX practicaland external training
completion targets, andmade efforts to create
digital skills training
programs in-house.

• Number of verified newtechnologies consistent
with business strategy:
5 (per year)○• Prepared a technology
roadmap, built amanagement system
proposal, and clarified theroles of each meeting body.

• Ensure operationof internal control
checklist (vertical)
and RCC (horizontal).
Further upgrade basedon issues identified
during operations.

○• Started using internal
control checklists (selfchecking)Utilizing
diverse humanresources andimprovinghuman
resource
capabilities

Promote activities forfemale employee• Female manager ratio
Global consolidated:
21%
Nissha nonconsolidated: 8%

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

Efficiency andproductivity
improvement

Efficiency and productivity
improvement by Digitizationof value creation process• Reduction of working
hours by automationand efficiency tools
such as RPA (compared
to 2020) by 100,000
hours / year
• Provide training
to improve AI/DX
education and IT
literacy: 20 subjects/
year

Ongoingtechnology
creation

Establishment of amanagement system basedon a technology roadmap
Promote three technologicalsynergies:
inter-business, inter-regional,
and inter-generational

Advancementof global
governance

Establish an internal control
framework along thebusiness axis (vertical) anda cooperative framework(RCC) along the regional axis
(horizontal)

Initiatives in FY2022• Conducted ESG training in
the U.S. and Europe* 〇 means achieved, △ means partially achieved, and × means not achieved.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Initiatives in Which Nissha Participate and External Evaluations

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

on the 10 principles of the Global Compact and work daily
toward achieving them with an eye to meeting the needs ofglobal society. We disclose information about our activities insustainability reports, published on the Nissha Group website.

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ TCFD (Task Force on Climate-Related Financial

Disclosures)

3-5-1 Initiatives in Which Nissha Participate■ United Nations Global Compact

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 United Nations Global Compact (UNGC), the world's largest
sustainability initiative, brings together the United Nations andthe private sector (companies and organizations) to build ahealthy global society. Its purpose is to have various companies
and organizations show responsible and creative leadership, andthereby act voluntarily as good citizens to achieve sustainablegrow th. Companies and organizations that sign the UNGC
are required to continue to work toward the realization of
the 10 principles, which relate to the protection of humanrights, the elimination of unfair labor practices, environmental
responsibility, and the prevention of corruption, based on thecommitment of the top management of the company.
At Nissha Group, we have in place various target s ba sed

Nissha Sustainability Report 2023

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

Environment
Principle 7: Businesses should support a precautionary approach toenvironmental challenges;

I n J a n u a r y 202 2 , w e e x p r e s s e d a g r e e m e n t w i t h t h e
recommendations from the TCFD (Task Force on Climate-related
Financial Disclosures).
The TCFD, established by the Financial Stability Board (FSB),
recommends that companies take measures to understand andaddress climate change-related risks and opportunities as amanagement issue.
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 climatechange moving forward, we will also promote the expansion of
information disclosure■ Japan Clean Ocean Material Alliance (CLOMA)

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.

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Nissha Group
Sustainability

Environment

SocialThird Party
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Human
RightsHuman
Resources

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Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

3-5-2 External Evaluation■ CDP■ EcoVadis■ FTSE Blossom Japan Sector Relative Index

I n D e c e m b e r 2 02 2 , w e
received a "B" rating in the
Climate Change Report 2022
published by the CDP, aninternational non-governmento r g a n i z a t i o n ( N G O) t h a t
focuses on the environment. This is the third highest of the eightlevels of evaluation.

We have been awarded the Silver rating in EcoVadis sustainability
survey. Silver is a rating for companies with an overall score in the
top 25% or higher of all evaluated companies.

We have been selected a s
a constituent stock of the
FTSE Blossom Japan Sector
Relative Index. This index
developed by FTSE Russell
is de sig ned to ref lec t theperformance of companies inJapan demonstrating strong
Environmental, Social and Governance (ESG) practices in eachsector. The Government Pension Investment Fund (GPIF) is using it
as their ESG index.

■ MSCI ESG Ratings■ FTSE Blossom Japan Index■ MSCI Japan ESG Select Leaders Index

We have received an “ A A”
rating (the second highest
rating) in MSCI ESG Ratings.
MS CI In c. c a l cu l at e s a n dpublishes numerous stock
indices, and provides a variety of tools for institutional investors
globally to support their decision-making on investment. The MSCIESG Ratings comprehensively evaluates the companiesʼ activities
for the environment, social, and governance of thousands ofcompanies around the world and compares them by industry. MSCI
evaluates and rates the companies in seven grades from the highest
rank “AAA” to the lowest “CCC”.

We have been selected a s
a constituent stock of the
FTSE Blossom Japan Index.
T h e F T SE B l o s s o m Ja p a n
Index is an index developed
by FTSE Russell that reflects
the performance of Japanese
co mp a ni e s w i t h su p er i o renvironmental, social and governance (ESG) performance. The
Government Pension Investment Fund (GPIF) using it as their ESG
index.

We have been selected as aconstituent stock of the MSCIJapan ESG S elec t Leader s
Index. This index is createdfrom among the constituentsof the MSCI Japan IMI Top 700 Index and the stocks with relatively
superior ESG ratings within each of the industry sectors, by MSCI
Inc. The Government Pension Investment Fund (GPIF) is using it as
their ESG index.

* THE USE BY Nissha Co., Ltd. OFANY MSCI ESG RESEARCH LLC OR ITS AFFILIATES (“MSCI”)
DATA, AND THE USE OF MSCI LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMESHEREIN, DO NOT CONSTITUTE A SPONSORSHIP, ENDORSEMENT, RECOMMENDATION, OR
PROMOTION OF Nissha Co., Ltd. BY MSCI. MSCI SERVICES AND DATA ARE THE PROPERTYOF MSCI OR ITS INFORMATION PROVIDERS, AND ARE PROVIDED ʻAS-ISʼ AND WITHOUTWARRANTY. MSCI NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI.

Nissha Sustainability Report 2023

EcoVadis is a global sustainability rating provider that aims to
improve corporate environmental and social initiatives throughout
the supply chain. They evaluate companies' activities in the areasof Environment, Labor Practices and Human Rights, Ethics, andSustainable Procurement.

* THE INCLUSION OF Nissha Co., Ltd. IN ANY MSCI INDEX, AND THE USE OF MSCI LOGOS,
TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE ASPONSORSHIP, ENDORSEMENT OR PROMOTION OF Nissha Co., Ltd. BY MSCI OR ANY OF
ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI AND THE
MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI OR ITSAFFILIATES.

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Nissha Group
Sustainability

Environment

Third Party
Verification■ S&P/JPX Carbon Efficient Index
We are included as aconstituent stock of the S&P/
JPX Carbon Efficient Index (asof March 2021). The S&P/JPX
Carbon Efficient Index is built
by the S&P Dow Jones Index,
one of the world ʼ s largest
independent index companies,
based on carbon emissions data from Trucost, a pioneer inenvironmental assessment. This index increases the investment
weight of companies in the same industry with high carbon
efficiency, and those that disclose information on their greenhousegas emissions. The Government Pension Investment Fund (GPIF) isusing it as their ESG index.

■ SOMPO Sustainability Index
We have been selected a s
a constituent stock of the2023
SOMPO Sustainability Index,
an index managed by Sompo
Asset Management Co., Ltd.
in succession since 2012.
Sompo Sustainability Index
This index is a unique active
index, which is composed ofapproximately 300 companies with outstanding ESG initiatives.

Nissha Sustainability Report 2023

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities■ Certified Health and Productivity Management Out-standing Organizations
We have been cer tified a s
a “ White 500 ” companies
in large enterprise categoryof Cer tified Health andProductivit y 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 healthmanagement 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 are certified as "White 500".

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
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■ Kurumin Certification
We have received “ Kurumin”
cer tification 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” isa certification of 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.

■ DX (Digital Transformation) Certification
In Aug us t 2021, we havecertified as a "DX-Certified
Operator" based on the DX( D i g i t a l Tr a n s f o r m a t i o n)
certification systemestablished by the Ministry of
Economy, Trade and Industry( M E T I ). I t w a s e v a l u a t e dthat our DX efforts and appropriate information disclosure to
stakeholders meet the standards required by METI.

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Nissha Group Stakeholders

We identify the stakeholders as our customers, shareholders,
employee s, supplier s, and s o ciet y. Toward realizing our
Mission, we aim to realize our respective visions while valuing a
relationship with the stakeholders in which we affect each other.

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Resources

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■ Employee
The Nissha Group recognizes that human resources are thedriving force for improving corporate value. We view changes
in the business environment as opportunities for growth, andaim to grow both the company and our employees by bringing
together "diverse capabilities and passions.” We respect ouremployeesʼ human rights and diversity from a global perspective,p r o m o t e t h e c r ea t i o n o f s af e, c o mf o r t a b l e w o r k p l a c eenvironments, and offer support for diverse work styles so that
our employees can live up to their full potential.

Communication

The Nissha Group's three core businesses are Industrial Materials,
Devices, and Medical Technologies, and we also operate a variety
of other businesses including Information and Communication,
and Pharmaceutical and Cosmetics. We provide a range of
products and services that satisfy market needs and engage inbusiness activities that help solve social issues. We also promote
fair operating practices, efforts in labor and human rights, andthe building of environment-conscious production systems sothat our customers can feel safe about entrusting us with work.

Governance• Sales activities in daily operations• Products and services information provided on our website• Providing information for sustainability survey• Providing information about conflict minerals• Supplier responsibility (SR) audits by customers

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 ourshareholders and investors through IR events and one-on-one
briefings. Feedback and comments are reported regularly at Boardof Directors meetings and to the management, and used for theenhancement of our corporate value.

■ Customer

Quality Management / Efficiency
and Productivity Improvement

Communication■ Shareholder

Nisshaʼs Circle of Trust

Governance• Shareholdersʼ 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 our
website• Materials published for shareholders and investors (integrated
report, business report, sustainability report, etc.)• Providing information to investigation institutions for ESG
investment

Communication• Dialogue between labor and management• Education and training• Personnel evaluation and interviews• Hotline• Providing information via the company intranet and company
newsletter• Engagement survey and interviews■ Supplier
We procure the materials, equipment, and services necessary for
production and a wide range of business activities from suppliersin various regions. We work fairly and equally with all suppliers topromote sustainable procurement in order to share awareness ofour 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

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■ Society
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 isneeded by society, we also strive to be aware of global social
issues and play a role in resolving them.

Communication• Environmental initiatives• Support and promotion of arts and culture• Future generation support activities• Exchange events with community people• Factory and facility tours• Cleanup activities in factory areas• Employeesʼ participation in volunteer activities

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4. Environmental Policy and Management Structures
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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 to all employees. We have also
issued the "Nissha Group Environmental Objectives". Each business location and division sets their own
goals in an effort to achieve those objectives, and acts in accordance with those activity plans. These
goals are linked with the Key Performance Indicators (KPI) 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 business activities.
Under the Risk Management and Compliance Committee, at Nissha Group in Japan Environmental
Management Representative take the core role in creating environmental management systems
through the leadership of a senior director of Corporate General Affairs, and Corporate 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 theelectronics and automobile industries.

Nissha Group, as a member of the global society, aim for business development and the realization of asustainable society through environmentally conscious corporate activities.

Environmental Management Structure
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

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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 we strive 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, setpriorities, and reflect the assessment in concrete actions. In addition to setting KPI directly related to business activity, we also strive
for environmental performance improvement that interlocks withquality targets, etc. Through these activities, we assess negative
risks that impose an undesirable impact on the environment andbusiness and engage in improvement, maintenance, and management aiming to reduce those risks.

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Moreover, the EMS for the Nissha Group covers all our bases, notonly 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 and set
their priority management items as appropriate. The effectivenessof our EMS has ensured a high level of performance by engaging
in confirmation, correction, and improvement through initiatives
including once-a-year periodic internal auditing and support for
responding to law and regulation revisions. Moreover, the biannual
management review report meeting includes confirmation on the
response to points stipulated by the Director of the Board, Senior
Executive Vice President (responsible for general affairs) and environment management representatives and the sharing of major
environmental risks and action examples that may be useful as areference. As such, it links to continued improvement.

In our currently active 7th Medium-term Business Plan (FY2021.12– FY2023.12), we set medical devices, mobility, sustainable materials, etc. as priority markets, and aim for growth via product lineups
and services that contribute to solving social issues. As positive environmental initiatives, our development and product technology divisions set development themes from the perspective of solving social
issues such as SDGs and life cycle assessments (LCA), at the productdesign and development stage. In addition to taking into consideration the reduction of environmental impact, we are promoting
development and mass-production of products that contribute to
reducing environmental impact, such as sustainable materials.

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5. Impact on the Environment out of Our Business Operations
In order to manage the impact on the environment out of our business operations, Nissha Groupgrasps the input of major materials, the amount of waste, the amount of energy and water used,
and the amount of exhaust and emissions.
The amount of major raw materials used at the Nissha Group in the fiscal year ended December
2022 was 123,982t, a decrease of approximately 3% from the 127,430t used in the previous
fiscal year. Of this amount, 19,114t was used at domestic production bases, a decrease of approximately 17% from the 22,981t used in the previous fiscal year. 104,868t was used at overseas
production bases, which is roughly the same amount as the 104,449t used in the previous fiscal
year. Overseas production bases account for approximately 85% of the total amount of major raw
materials used. Of this amount, the paper used for Nissha Metallizing Solutionsʼ metallized paper
products accounted for approximately 73%.
The amount of energy used by the Nissha Group was 250,732MWh of electricity, a decrease of
approximately 6% from the 264,973MWh used in the previous fiscal year, and 10,485,000m3 ofgas, which is roughly the same as the 10,558,000m3 used in the previous year. From the fiscal year
ended December 2020, CO2 emissions are calculated using the market-based method for bases inJapan and the location-based method for overseas bases.
The overall Nissha Group waste material gross emissions were 27,207t, a decrease of approximately
11% from the 30,587t emitted in the previous fiscal year. In addition, Nissha Group in Japan wastematerial gross emissions were 13,606t, a decrease of approximately 22% from the 17,465t emitted in the previous fiscal year. The source of the reduction was a decrease in waste material output
by Nitec Industries, Inc. (NII) and Nitec Precision and Technologies, Inc. (NPT). The overseas Nissha
Group company waste material gross emissions were 13,601t, an increase of approximately 4%
from the 13,122t emitted in the previous fiscal year.

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INPUT

Materials

Devices

PET/acryl film

Overseas production bases
1,057tResin/plastic
Film

Gravure ink

705t

Molds and molding

Resin

160t

materials

Others106t

Touch sensors

0t

Packing materials

116t

Paper

11,244tturing processes

Metalnologies

Others*1

Others900t

Product materials

73t

Resin materials

35t

PET film

4t

Alminum

6t

Packing materials

33t

Paper

3,764tInk

40t

Others32t

Total for production bases in Japan

noble metals(items sold for

Metal waste

recycling)

Resin waste(items sold for Resin waste
113t

88,318t

recycling)

Paper waste

Recyclable

Waste plastic

resources

Iron scrap, waste cans(industrial

Waste solvents, waste ink,

waste)

waste cloth
Sludge, others

2t

Chemical substances

92t
6,551tOthers1,438tTotal for overseas production bases

104,868t

Total for Nissha Group

123,982t

6t

Metal waste

1,991tResin materials

assembly

Waste containing

resources

Waste acid, alkali

Aluminum

Printed circuit board

resources

Waste containing noble metals

123t

3t

196t

52t

Recyclable

Recyclable

Cardboards

Metallic materials

Half-finished goods

Medical Tech-

6,075t748tMaterials used inOverseas production bases

Production bases in Japan

Solvents

product manufac-

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OUTPUT

Production bases in Japan
Industrial

GovernanceWaste for

General business waste

simpleOthers (industrial waste)incineration/

4,203tPaper waste
Others9,380t22t

landfill
Total for production bases in Japan

13,606t

Recyclable

Waste plastic

resources

Waste ink, waste(industrial

solvents

waste)

Others

Non-recyclable

Incineration/

waste

landfill

EnergyWater

Electricity

250,732MWh

Gas

10,485,000m3

Tap water

993,000m3

Underground water

49,000m3

Industrial water

877t

1,819tTotal for overseas production bases

13,601t

Total for Nissha Group

27,207t

Including production bases in Japan and overseas
Emissions
Wastewater

114,691t

CO2
VOC

Including production bases in Japan and overseas

10,904t*2752t
2,342,000m3*2. Detoxified by direct combustion, catalyst deodorization, etc.

1,549,000m3

19,114t*1. Posted as "Information and Communication" until Nissha
Sustainability Report 2021

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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 takemeasures to understand and address climate change-related risks and opportunities as a management
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 in the January 2023 revisions
to the Cabinet Office Ordinance on the Disclosure of Corporate Affairs, and analysis of the financial
impact of risks and opportunities related to climate change on business is becoming essential.
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■ Materialities (Key Issues) Management
Materialities (Key Issues) for the Group are risks and opportunities related to the realization of ourSustainability Vision. Materiality is identified through deliberation and resolution by the Board of
Directors meetings and managed by the Sustainability Committee which is chaired by the Chairmanof the Board, President and CEO and vice-chaired by the Director of the Board, Executive Vice President (Director of ESG Promotion).
The Sustainability Committee receives and confirms quarterly progress reports on targets (KPIs andaction items) related to materialities, including responses to climate change, from business organizations, divisions and the ESG Task Force which handles particularly important material issues.
Targets are reviewed annually and updated as necessary, and the set targets and their progress arereported at a Board of Directors meeting once a year.
The Board of Directors oversees the activities of the Sustainability Committee, which manages thetargets (key performance indicators and action items) related to materialities, discusses reports fromthe Sustainability Committee, and gives improvement instructions as necessary.
In addition to reporting progress to the Sustainability Committee, the ESG Task Force discusses thecompanyʼs response to climate change with the Chairman of the Board, President and CEO and the
Director of the Board, Executive Vice President (Director of ESG Promotion) on a quarterly basis.

The Group has set out where it wants to be in terms of management by 2030 in the form of ourSustainability Vision (long-term vision). We are aiming to create social value by providing products
and services that contribute to solving social issues, and to achieve a 30% reduction in total CO 2
emissions in 2030 (compared to 2020) with a view to carbon-neutral by 2050.

Important strategic and financial decisions concerning our response to climate change are made by
the Chairman of the Board, President and CEO within the scope of his authority. In order to makedecisions appropriately, the Chairman of the Board, President and CEO and the Director of theBoard, Executive Vice President (Director of ESG Promotion) receive information on climate change
through study sessions and training by outside experts.

The Nissha Group manages its response to climate change by distinguishing between materiality(risks and opportunities related to the realization of our Sustainability Vision), which are material issues for the Group, and general risks (risks related to smooth business operations).

■ General Risks Management

Nissha Sustainability Report 2023

General risks related to smooth business operations are managed by the Risk Management andCompliance Committee, which is chaired by the Director of the Board, Senior Executive Vice President (in charge of legal affairs) and whose members include the Chairman of the Board, President
and CEO.

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The Risk Management and Compliance Committee manages key risks that are identified, evaluated,and selected from a company-wide perspective. The Committee receives and confirms progress reports from the subcommittees and divisions that manage such risks on a quarterly basis, and reports
on its activities to the Board of Directors once a year.
The Board of Directors oversees the activities of the Risk Management and Compliance Committee,
discusses reports from the Risk Management and Compliance Committee, and gives improvement
instructions as necessary.
The company has selected Business Continuity (natural disasters such as earthquakes, typhoons, andfloods) as one of our key risks and includes climate change risk in this category. The Business Continuity Management Subcommittee, which manages such risks, formulates and updates emergency preparedness based on the most recent potential natural disasters and response plans for when a disasteroccurs, and reports its activities to the Risk Management and Compliance Committee. The Chairmanof the Board, President and CEO and the Director of the Board, Senior Executive Vice President incharge of legal affairs monitor the content of such reports and give instructions as necessary.

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Strategy

We have conducted a scenario analysis of the impact of future climate change on our business operations, using a range of scenarios of projected environmental change, based on the framework
recommended by the TCFD.
For this analysis, of the three main businesses we operate, we have added the Industrial Materials
business to the Devices business, which was the target of the previous analysis. We also analyzed theimpact of future climate change on our business on a time horizon of 1 to 2 years in the short term,
3 to 5 years in the medium term, and 6 to 10 years in the long term, including the Sustainability Vision, and we considered measures to respond to these impacts.
(1) Scenario analysis assumptions‒ Scenario analysis target business: Industrial Materials business and Devices business‒ Scenario analysis time horizon: Study transition risks and physical risks and opportunities in the

short term (1-2 years), medium term (3-5 years), and long term (6-10 years)‒ Assumed scenario: See IEA's Net Zero Emissions by 2050 (NZE) *1, Stated Policies Scenario(STEPS)*2, IPCC's RCP4.5*3 and RCP8.5*4, etc. scenarios

Temperature rise in 2100 under each scenario

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

Nissha Sustainability Report 2023

*1 NZE: a scenario in which the world decarbonizes
and achieves virtually zero CO 2 emissions in
2050. It is called the “1.5 °C scenario” because
the average temperature increase as of 2100,
compared to pre-industrial times, will be between
1.3 and 1.5°C.
*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 “3 °C scenario” because the average temperature increase
as of 2100, compared to pre-industrial times, will
be between 2.4 and 2.8°C.
*3. RCP4.5: a scenario in which CO2 emissions peak in
2040 and stable economic development is achieved.
*4. RCP8.5: a scenario in which CO2 emissions continuously increase and uneven economic development is achieved.

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Under the two scenarios referenced from the IEA, we believe that we can visualize many climatechange-related risks and opportunities by using the 1.5°C scenario in which regulations are tightened
and zero CO2 emissions are achieved by 2050, and the 3 °C scenario in which no additional policies
are introduced and climate change measures do not progress.
(2) Scenario analysis process
Scenario analysis was conducted using the following process:(i) Consider significant climate-related risks and opportunities for the Industrial Materials business and the Devices business(ii) Consider and create scenarios as preconditions for evaluation(iii) Assess risks and opportunities based on the scenarios(Risks and opportunities are assessed by calculating and evaluating the "financial impact" asof 2030 using the parameters in each scenario, and the results are described below as “magnitude of risk” and “magnitude of the opportunity.”)(iv) Consider countermeasures(3) Results of risk analysis
Our transition and physical risks related to climate change, and the magnitude of the risks in eachscenario, as well as our response to these risks are analyzed and considered as shown in the tablebelow for the set time horizon.
Based on this analysis, we have concluded that there are no significant and difficult-to-address risks
related to climate change in our Industrial Materials and Devices businesses at this time. The following climate change risks are applicable to both businesses and will have a relatively large impact on
our business.

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was completed in January 2022 at the Nitec Industries, Inc. Koka Factory, which is the production
base for the Industrial Materials business, while Nitec Precision and Technologies, Inc. plans toswitch to only using renewable energy source by the end of the fiscal year ending December 2023
for electricity at its Kaga and Himeji factories, which are the production bases for the Devices business. At overseas bases, since 2018, Nissha (Kunshan) Precision IMD Mold Co., Ltd. (China), a production base for the Industrial Materials business, has continued to generate solar power, and Nissha
Metallizing Solutions (Belgium) has replaced part of its electricity with solar and wind power at its
production bases. Other measures include reducing power consumption by streamlining production
and saving energy in production and infrastructure facilities. We will continue to promote measureswhile verifying the cost and effectiveness of such measures.
As a measure to address (ii), in the Industrial Materials business, we are investigating technologicaltrends, examining the use of biomass PET and other biomass plastics and recycled plastics, and developing products to reduce the use of virgin plastics.
[Physical risks]No physical risks have been identified at this stage.
We have taken measures to address risks in the Industrial Materials and Devices businesses that havea relatively large impact with respect to climate change and we believe that the businesses are resilient to climate change.
We will continue to monitor trends in the business environment under the 1.5°C and 3°C scenariosand develop our business strategically.

[Transition risks](i) Increase in production and countermeasure costs due to carbon taxation on CO 2 emissions(1.5°C scenario)(ii) Increase in the cost of procuring raw materials needed to produce products due to the carbon
taxes (1.5°C scenario)
As a measure to address (i), we are promoting the switch to renewable energy sources at our production bases. At our production bases in Japan, the switch to only using renewable energy for electricity

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Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Results of risk analysis
Type

Changes in the external environment

Introduction of a carbon tax
Policies/laws and regulations

Changes in national carbon emission
targets and policies

Introduction of plastic tax

TargetbusinessTimehorizonRisks to Nissha

Increase in production and countermeasure costs due to carbon
Industrial Materials
Medium to taxation on CO2 emissions
businesslong-term Increase in the cost of procuring raw materials needed to produce
Devices businessproducts due to the carbon taxes
Industrial Materials
Increase in electricity procurement costs due to switch to renewablebusiness
Medium to energy sources for electricity and soaring levies, etc.
Devices businesslong-term
Cost of reducing CO2 emissions in logistics (procurement and shipDevices businessping) increases
Industrial Materials Medium to Increase in the cost of procuring raw materials needed to produce
businesslong-term products due to the progression of plastics-related regulations

Industries and Markets

Transition risk

Medium to Restrictions on use of specified CFCs and their substitutes used atlong-term production bases increase capital investment costs

Risk magnitude*1,2
3℃
1.5℃

-

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

‐

Small

‒ Study the use of biomass plastic and recycled plastic as low-carbon materials, research technological trends

Small

Increase in EV sales

Industrial Materials
business

Short tolong-term

Decrease in sales opportunities for EV-related products due tochanges in market structure

Small

Devices business

Short tomediumterm

Net sales decline due to lost business opportunities caused byinsufficient responses to customer requests

Small

Technologies
Reputation

Growing importance of ESG assessDevices businessment in customersʼ supplier selection

Mediumterm

Short tomediumtermand develop products‒ Further promote the development of the ecosense molding brand of sustainable molded products oriented

toward the elimination and reduction of plastic, and increase the sales ratio of sustainable materials

Fluctuations in raw material prices

Transition to materials and technoloDevices businessgies with lower environmental impact

and develop products

Small

Increase in petrochemical material costs due to changes in crude oil
Industrial Materials Medium to demandbusinesslong-term Increase in raw material costs due to increased use of reprocessed
plastic

Net sales fall due to substituting our products for low-carbon products made by other companies‒ Study the use of biomass plastic and recycled plastic as low-carbon materials, research technological trends

Small

Devices business

Costs increase due to replacing product packaging materials‒ Switch to renewable energy sources at production sites‒ Introduce energy-saving production equipment‒ Introduce energy-saving production equipment‒ Reduce electricity consumption

Introduction of CFC regulations

Changes in customer behavior(increase in requests from customers
to reduce CO2 emissions)

Countermeasures

Medium‐‐MediumMedium ‒ Research technology trends to enable compliance with CFC regulations
‐

Small
‐

‒ Study the use of biomass plastic and recycled plastic as low-carbon materials, research technological trends

and develop products‒ Further promote the development of the ecosense molding brand of sustainable molded products oriented

toward the elimination and reduction of plastic, and increase the sales ratio of sustainable materials‒ Promote product development and enhance production facilities in response to market trends for next-gen-eration vehicles other than Evs

Medium ‒ Conserve energy through improved productivity and reduce CO2 emissions through switch to renewable energy
Small‒ Investigate alternative materials that can reduce costs while maintaining the quality of packaging materials

Medium ‒ Develop low-carbon products with lower environmental impact

Net sales decline due to lost business opportunities resulting from
Mediumdelays in the development of low-carbon technologies

Medium ‒ Promote the development of low-carbon technologies

ESG assessment declines due to delays in addressing climate-related issues, and we are not chosen as a supplier resulting in a decline
in net sales

‐

Small

‒ Enhance climate change initiatives and disclose information appropriately

Small

Small

‒ Improve and strengthen BCP, and establish a system to support affected sites‒ Build a supply chain for stable procurement, including multi-company purchasing and outsourced production of raw‒ Decline in net sales due to production delays or suspensions

Acute

Physical risks

Intensification of extreme weather*3

Industrial Materials
business
Devices business

Short tolong-term

resulting from damage to production bases, and incidence ofrepair costs due to damage to company assets such as buildings,
facilities, and inventory‒ Decline in the companyʼs net sales due to the impact of the suspension of the supply of raw materials and parts due to disasters
at suppliers

materials at multiple factories and lines*1. Risk magnitude evaluation horizon: Annual decrease in net sales large: 20 billion yen or more, medium: 5 to 20 billion yen, small: less than 5 billion yen, annual decrease in profit: large: 3 billion yen or more, medium: 1 to 3 billion yen, small: less than 1 billion yen*2. Scenarios in which no risks are incurred are indicated with a “-”*3. Physical risks are evaluated by considering the degree of financial impact and frequency of occurrence

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources(4) Results of opportunity analysis
Based on our awareness that solving social issues related to climate change will create our business
opportunities, we have analyzed and examined the magnitude of the opportunities in each scenario
and our response to these opportunities in the time horizon we have set, as shown in the table below.
The following climate change opportunities are applicable to the Industrial Materials business or theDevices business and will have a relatively large impact on our business.
(i) Increase in demand for products that contribute to reductions in GHG emissions (both 1.5 °C and
3°C scenarios)(ii) Increase in sales opportunities for EV-related products due to changes in market structure (1.5 °C
scenario)
As a measure to address (i), the Industrial Materials business aims to expand sales of existing decorative films and molded products for mobility and consumer electrical appliances. The Nissha Group's
decorative films and molded products contribute to the reduction and control of GHG emissions byadding patterns and functions at the same time they are molded to eliminate the need for secondary decoration processes after molding, as well as by building an optimal supply chain for customers
from seven molding bases located around the world. We also aim to create products with even lower

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

environmental impact by undertaking recyclability studies and conducting Life Cycle Assessments(LCA) for each product to quantitatively evaluate the environmental impact.
In the Devices business, we are aiming to expand sales of gas sensor modules that can detectnext-generation refrigerants produced by Nissha FIS. Although the next-generation refrigerants usedin air conditioning and refrigeration units today have low ozone depletion potential, leak detection
is necessary as they are mildly flammable and have an extremely high greenhouse effect. We believethat our Group's gas sensors can contribute to both safety and the prevention of global warming,
and we aim to increase our net sales by expanding our sales region to include North America andother overseas markets.
As a measure to address (ii), we have identified the expansion of products targeting the mobility
market as one of the priority markets for achieving our Sustainability Vision, and we are working toenhance EV-related products as a measure to address climate change.
The Industrial Materials business aims to expand sales of exterior decorative and functional products. For EVs that do not require engine cooling, there is a growing need to decorate the front as avehicle face design to replace the front grille, as well as a need to add functions to ensure the proper
operation of automatic driving radars in this area.

Results of opportunity analysis
TimehorizonIndustrial Materials business
Devices businessMedium tolong-term

Industrial Materials business

Increase in EV sales
Fluctuations in raw
material prices

Changes into theexternal environment

Policies/laws
and regulations

Target businessType

Carbon price
Changes in national
carbon emission
targets and policies

Industries and Markets

Arrival of a hydrogenbased society

Opportunities to Nissha

Opportunity magnitude*1,2
3℃

1.5℃

Expansion of demand for products that contribute to GHG emission
reductions

MediumMediumMedium tolong-term

Increase in sales opportunities for plant-derived sustainable molded
products due to the progression of plastics-related regulations

-

Small

Industrial Materials business
Devices business

Short tolong-term

Increase in sales opportunities for gas sensor modules for refrigerant
detection*3 that contribute to reducing GHG emissions

Small

Small

Industrial Materials businessMedium tolong-term

Increase in sales opportunities due to increased demand for sustainable
molded products as a result of the lower costs of plant-derived plastics

-

Small

Devices businessMediumterm

Demand for Fuel Cell Vehicles (FCVs) expands

Small

Small

Countermeasures‒ Develop and expand sales of products that contribute to GHG emission reductions (highly recyclable

decorative film moldings, gas sensor modules for refrigerant detection, etc.)‒ Further promote the development of the ecosense molding brand of sustainable molded products orient-

ed toward the elimination and reduction of plastic, and increase the sales ratio of sustainable materials‒ Develop and expand the sale of new products for EVs (decorative film molded products and functional

products for exteriors, touch sensors, etc.)‒ Further promote the development of the ecosense molding brand of sustainable molded products orient-

ed toward the elimination and reduction of plastic, and increase the sales ratio of sustainable materials‒ Develop and expand sales of products for the mobility market (such as hydrogen detectors) that con-tribute to reducing our environmental impact*1. Opportunity magnitude evaluation horizon: Annual increase in net sales large: 20 billion yen or more, medium: 5 to 20 billion yen, small: less than 5 billion yen, annual increase in profit: large: 3 billion yen or more, medium: 1 to 3 billion yen, small: less than 1 billion yen*2. Scenarios in which no opportunities are incurred are indicated with a “-”

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Nissha Group
Sustainability

Environment

Third Party
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SocialHuman
RightsHuman
Resources

The Devices business aims to expand sales of touch sensors for curved surfaces and large displays.
Our touch sensors are made from film-based material which provides high visibility and a narrowframe while being thin, light, unbreakable, and bendable. In line with the growing demand for designs for next-generation vehicles, a variety of touch sensors that leverage these features are required for EVs.

Fair Operating Practices/ Local Communities

6-3

Risk Management

The Nissha Group manages its climate change risks by distinguishing between materialities (risks andopportunities related to the realization of the Groupʼs sustainability vision), which are key issues for
the Group, and general risks (risks related to smooth business operations) and by the Sustainability
Committee and the Risk Management and Compliance Committee assessing and managing each ofthese risks in accordance with 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 strategic items, key performanceindicators, and action items backcasting from 2030 as a starting point. Materialities are evaluatedfrom the perspectives of creating business opportunities, risk reduction, strengthening managementfoundations, and corporate governance using the two axes of “importance to society and stakeholders”, and “importance to Nissha”. The identified issues and their position within the Group are prioritized by the Sustainability Committee, and 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.

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement

GovernanceMateriality

Risk reduction

We aim to expand net sales by developing new products that meet these EV needs to expand our
product lineup.
We intend to reflect our scenario analysis results in our business strategy, such as the growing demand for products that contribute to reducing GHG emissions and the expanding EV market.

Governance

GRI Standards Content
Index / ESG Data

Related SDGs

Responding to climate change

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

opportunities
Promotion of circular economy

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.
Activities related to creating business opportunities are handled by the business organization. The
business organization reports to the Chairman of the Board, President and CEO at monthly meetings(business reviews), at which the Chairman of the Board, President and CEO confirms the progress ofbusiness strategies based on key performance indicators and gives instructions on necessary action.
The Sustainability Committee reports its activities annually to the Board of Directors, and the Boardof Directors utilizes the contents of the report to formulate the Medium-term Business Plan andRolling Plan.
Refer to 3-3 Promotion Framework for Sustainability / 3-4 Materialities (Key Issues) and KPIs

■ Risk Management by the Risk Management and Compliance Committee
We select risks by carrying out risk assessments over the entire Group and selecting from both abusiness activity perspective and a company-wide perspective. From the business activity perspective, hearings were held with each business unit and subsidiary, in addition to the relevant subcommittees, and assessments were made in line with business activities. Then, assessing them from acompany-wide perspective in order to work to integrate the risks selected from a business activities

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Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

perspective with management strategies, the important risks (including climate change risks) are selected at a general meeting held once a year.

■ Risk Assessments（1） Target risks‒ Cross-group risks including compliance risks

Refer to 28-4 Risk Assessments（2） Selection process for key risks

The following process is used by the Risk Management and Compliance Committee to select key risks.
(i) For the above cross-group risks, the high-value risks calculated using the "probability of occurrence" and "impact when it occurs" horizons are considered the "inherent risks".
(ii) In addition, the "effectiveness of control activities" is evaluated, and risks with low "effectiveness of control activities" with respect to "inherent risks" are selected as key risks.

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

ness Continuity Management Subcommittee of the Risk Management and Compliance Committee.
The Business Continuity Management Subcommittee, which manages such risks, works to mitigate
risks based on KPIs 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.

6-4

Indicators and Targets

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.

The Nissha Groupʼs CO2 Emissions Reduction Target and Results (Scope1 and 2)（3） Management method‒ Key risks (low "effectiveness of control activities" with respect to "inherent risks"): The lead de-partment or subcommittee establishes key performance indicators and action items, and the
Risk Management and Compliance Committee confirms progress (business risks are led by thebusiness organization and confirmed by business reviews and other means).
‒ High "effectiveness of control activities" with respect to "inherent risks": Subject to monitoring

and the Risk Management and Compliance Committee confirms the status of maintenanceand operation by the lead department or subcommittee.
‒ Cross-group risks other than "inherent risks": Managed by the business organization and leaddepartment, and reported at the Monthly Business Review (MBR).
The company has selected Business Continuity (natural disasters such as earthquakes, typhoons, andfloods) as one of our key risks and includes climate change risk in this category.
As a measure to address risks, a "Business Continuity Plan" has been formulated to prepare for and respond to natural disasters and emergencies should they occur, and the plan is promoted by the Busi-

Nissha Sustainability Report 2023

* We are in the process of calculating Scope 3 for initiatives to set future reduction targets and reduction efforts, and have disclosed the emissions that
we have been able to calculate for the fiscal year ended December 2022. We will continue to work on expanding the scope of these calculations.

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

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 important, 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 Industrial Materials business and Devices businesses. In the next fiscal year, we will continue to analyze our three core businesses, including the Medical Technologies business.

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

7. CO Emissions and Reduction Efforts
2

7-1

CO2 Emissions Reduction Target

The move around the world towards a decarbonized society in an effort to reduce global greenhousegases is progressing in response to 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 to limit the average global temperature rise to below 1.5°C compared to pre-industrial levels (1.5°C target). In response, companies are
required to set medium- to long-term GHG emission reduction targets consistent with the level requiredby the 1.5°C target to work towards the 2050 net-zero target, and to disclose information appropriately.
In addition, at the G7 Climate, Energy, and Environment Ministers Communique in April 2023, various agendas were discussed, including a commitment by the G7 to take leadership to achieve the 1.5°C target and scale-up action against the effects of climate change.
Nissha Group regards addressing climate change as one of its most important management issues.
Our Sustainability Vision (long-term vision) aims for a 30% reduction in CO 2 emissions in 2030
(compared to 2020) with a view to achieving carbon neutrality by 2050.
As a specific activity to realize our Sustainability Vision, we have established and are promoting atask force under the Sustainability Committee on the theme of addressing climate change. The Sustainability Committee is chaired by the Chairman of the Board, President and CEO. The task force isworking 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.
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.

Nissha Sustainability Report 2023

7-2

Summary of Emission

Energytype

Reference year
(FY2020)

FY2021

Emission

Emission

Emission（t-CO2）（t-CO2）（t-CO2）Average over

FY2022the 3 years

Comparison
with the reference year（％）

Emission（t-CO2）

Scope 1 Mains gas

20,85324,19628,43536.4

24,495

Scope 2 Electricity

103,351

101,048

86,255-16.5

96,885

Total

124,204

125,244

114,691-7.7

121,380

The Groupʼs CO2 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 2022, CO2 emissions decreased by 8.4% compared to the previous fiscal year due to the introduction of renewable electricity at the Nitec Industries, Inc. (NII) Koka
Factory and a decrease in electricity consumption at the Nitec Precision and Technologies (NPT)
Himeji Factory and Kaga Factory, as demand for tablet products entered an adjustment phase.
Refer to 8. Third Party Verification
The above total CO2 emissions for the fiscal year ended December 2022 of 114,691 (t-CO2) includes 4,121 (t-CO2) of CO2 emissions as a result of chemical reactions. CO2 emissions as a result ofchemical reactions were discovered at NII (Koka Factory), Nissha Metallizing Solutions GmbH (Germany), and Nissha Metallizing Solutions N.V. (Belgium). We will continue to monitor CO 2 emissions
as a result of chemical reactions.

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Nissha Group
Sustainability

Environment

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

SocialHuman
RightsHuman
Resources

NPT: Nitec Precision and Technologies, Inc.
NCI: Nissha Printing Communications, Inc.

FY2020

FY2021

FY2022Nissha and others

3,721

3,925

4,249

NII

11,507

13,253

6,835

NPT

69,57265,60453,056

NCI

770

870

666

Overseas production bases

38,634

41,592

49,885

Total

124,204

125,244

114,691

0.69

0.66

0.59

Basic Unit*

Governance

GRI Standards Content
Index / ESG Data

■ Electricity Consumption

Company*CO2 emissions / Net sales (Millions of JPY)

■ Energy Consumption and Basic Unit
(unit: 1,000GJ, excluding basic unit)(unit: MWh)

Company

FY2020

FY2021

FY2022Nissha and others

9,002

9,090

11,590NII

17,633

19,30018,559NPT

154,259

151,635

126,056

NCI

2,306

2,463

2,130

Overseas production bases

74,264

82,48592,397

Total

257,464

264,973

250,732■ Gas Consumption(unit: 1,000m3)

Company

FY2020

FY2021

FY2022Nissha and others

220

244

195

NII

2,506

2,891

2,571

NPT

1,441

1,729

2,015

NCI

0

0

0

Overseas production bases

4,919

5,694

5,703

Total

9,085

10,558

10,485Company

FY2020

FY2021

FY2022Nissha and others

102

104

124

NII

271

322

134

NPT

1,603

1,590

1,327

NCI

23

25

21

Company

FY2020

FY2021

FY2022

Overseas production bases

967

1,084

1,055

Nissha and others

54

48

39

Total

2,966

3,124

2,662

NII

6

8

10

Basic Unit*

0.01650.01650.0137

NPT

12

11

10

*Energy consumption (1,000GJ) / Net sales (Millions of JPY)

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement(unit: t-CO2, excluding basic unit)

2. The company names listed in the tables are as follows.
NII: Nitec Industries, Inc.

Fair Operating Practices/ Local Communities■ CO2 Emissions Volumes and Basic Unit

the market-based method for Japan and the location-based method for overseas.

Nissha and others: Nissha Co., Ltd. and affiliated companies

Governance■ Gasoline, Diesel, and Heavy Oil Consumption

NCI(unit: kl)

0

2

2

Overseas production bases

133

151

147

Total

205

220

207

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

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 andpart of the electricity used at the NPT Kaga Factory, a production
base for the Devices business, to renewable energy sources in
September 2022. We plan to switch to 100% renewable energy
sources for electricity used at the NPT Kaga and Himeji factories
by the end of 2023.
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 N.V. (Belgium) replaced part of its electricity with wind power at its production bases. Nissha Metallizing
Solutions S.r.l. (Italy) introduced solar power generation in 2022
and a cogeneration system* in 2023, and is generating electricity through gas combustion and effectively using the waste heatgenerated to produce hot and cold water.

Human
Rights7-5

powered by just one primary energy source like gas. All the thermal energy produced by
combustion is reused for water heating, air conditioning, and other purposes.

Fair Operating Practices/ Local Communities

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.
The actual basic unit for each production base in the fiscal year
ended December 2021 was set at 1.00, and the target for 2022
was set at 0.99 or less, based on this. The results were as follows.
NII Koka Factory switched to 100% renewable energy and substantially exceeded its target. NCI worked to improve efficiency
and achieved 0.99 or less compared to the previous fiscal year's
results. The Nissha Global Headquarters failed to meet its target
due to an increase in electricity consumption, while the NPT
Himeji Factory and NPT Kaga Factory failed to meet their targets
due to a deterioration in basic unit energy consumption.

In addition, we are switching to LED lighting and upgrading aging
facilities with energy-efficient equipment to contain electricity
consumption.
* A power generation and supply system that produces electricity and heat simultaneously

Human
Resources

Governance

Company

Basic unit
(based on production volume etc.)
FY2021
results

FY2022targetFY2022
results

FY2022
evaluation

Quality Management / Efficiency
and Productivity Improvement

7-6

GRI Standards Content
Index / ESG Data

GovernanceInitiative in Scope*13 Management

In the fiscal year ended December 2022, the ESG Task Force (onclimate change) took the lead in reaffirming the applicability of Scope
3 for each category. As a result, as shown in the following table, we
confirmed that Scope 3 applies to 9 categories, and that Scope 3 iscurrently*2 expected to exceed 40% of the total of Scope 1, 2, and 3.
Categories 1, 4, 6, 7, and 11 were subjected to third party verification by DNV Business Assurance Japan K.K.
(unit：t-CO2)

Scope 3 Category
1 Purchased goods and services

Coverage
Domestic

Overseas50,616

Under investigation

2 Capital goods

17,126

Fuel and energy-related activities (not3
included in Scope 1, 2)

15,684

Upstream transportation and distribution ofpurchased products*3

4,272

6,824

Upstream transportation and distribution of
shipments*4

7,398

Under investigation

6 Business travel

579

Under investigation

7 Employee commuting

2,261

Under investigation

535

Under investigation

4

5 Waste generated in operations

4,462

11 Use of sold products
12 End of life treatment of sold products

7,739

Total

117,496*Figures in bold have been certified by a third party

Nissha(Headquarters)

1.00 0.99 or less

1.06

×

Refer to 8. Third Party Verification

NII Koka Factory

1.00 0.99 or less

0.60

〇

*1. Scope: Scope of greenhouse gas (GHG) calculation. The following three are shown.

NPT Himeji Factory

1.00 0.99 or less

1.20

×

NPT Kaga Factory

1.00 0.99 or less

1.69

×

NCI

1.00 0.99 or less

0.92

〇

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. as of June 30, 2023
*3. Distribution of upstream major domestic material suppliersʼ raw materials to the point of delivery*4. Logistics of major upstream domestic suppliersʼ products and raw materials to the point of delivery

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RightsHuman
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Coverage and Calculation Method of CO2 Emission
Calculation■ Scope 1, 2

Coverage• Nissha Co., Ltd.

• Nissha Medical Technologies SAS• 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.

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Scope 3
Category1. CO2 emissions from major domestic material suppliers
Coverage

Major domestic / overseas suppliers at Nissha Group in Japan (39 companies)

Calculation

CO2 emissions per product or supplier electricity and fuel consumption x emission factor x

methodsales ratio

The verified 50,616t-CO2 emissions are from 39 key suppliers of Nissha Group in Japan, from whom
we purchase 73% of all our purchases.
Since the Nissha Group has approximately 8,000 suppliers globally, monitoring the emissions of all
suppliers is a challenge.
Category4. CO2 emissions from distribution of upstream major domestic material suppliers

izados Ltda

• Nissha Medical Technologies• Nissha Metallizing Solutions GmbH• Lead-Lok, Inc.

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

• CEA Global Dominicana, S.R.L.

• Guangzhou Nissha High Precision Plastics Co., Ltd.

• CEA Medical Manufacturing, Inc.

• Nissha Precision Technologies Malaysia Sdn. Bhd.

• Nissha Medical Technologies Ltd.

• Nissha SB Poland

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

Coverage

Major domestic / overseas suppliers at Nissha Group in Japan (23 companies)

Calculation

Total CO2 emissions of suppliers calculated using either the ton-kilometer method, fuel con-methodsumption method, or fuel method

The verified 4,272t-CO2 emissions are from 23 key suppliers of Nissha Group in Japan, from whom
we purchase 58% of all our purchases. The ESG Task Force plays a central role in conducting studies
to achieve 100% coverage in the future.

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

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RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Category4. CO2 emissions from logistics of major upstream domestic suppliers

Category 11. CO2 emissions from use of sold products

Coverage

Logistics suppliers (31 companies)

Coverage

Sum up domestic transportation: based on the Fuel Economy Law and overseas transporta-

Calculation

tion: CO2 emissions from Global Logistics Emissions Council (GLEC) Framework for Logistics

methodCalculation
methodGovernance

GRI Standards Content
Index / ESG Data

Gas sensors provided by Nissha FIS, Inc. (21 types)
Calculated by electricity consumption × product life × annual sales × emission factor

Emissions Accounting and Reporting Version 2.0

The verified 7,398t-CO 2 emissions are from 31 major upstream logistics suppliers to the Nissha
Group in Japan, from whom we purchase 93% of all our purchases. The ESG Task Force plays a central role in conducting studies to achieve 100% coverage in the future.
Category 6, 7. CO2 emissions associated with business travel and employee commuting

The verified 7,739 t-CO2 emissions cover all the products produced (or products sold) by the Nissha
Group. Among the Group's products, the gas sensor range, which are active devices, fall under Category 11, while other products do not fall under this category. As a result, the gas sensor range emissions are calculated and are subject to verifications.
* Calculations of CO2 emissions are subject to inherent uncertainty due to, for example, incomplete scientific knowledge used to determine emission
factors and numerical data.

• Nissha Co., Ltd.
• Nitec Industries, Inc.
• Nitec Precision and Technologies, Inc.
• Nissha Printing Communications, Inc.
Coverage• Nissha F8, Inc.
• M crossing Co., Ltd.
• Nissha FIS, Inc.
• Nissha Business Service, Inc.
• Zonnebodo Pharmaceutical Co., Ltd. (commuting only)
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.2.4)”
Ministry of the Environment "Calculation intensity database for calculating greenhouse gas
emissions of organizations through the supply chain（Ver.3.2)”

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Sustainability

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SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

8. 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.

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Sustainability

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Verification

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RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
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and Productivity Improvement

Governance

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Index / ESG Data

9. Waste Management
9-1

Total Amount of Waste
Generated by Nissha GroupIn the fiscal year ended December 2022, the Nissha Groupgenerated a total of 27,207t of waste, including waste sold forrecycling, waste reused as resources, and waste for simple incineration/landfill.

■ Total amount of waste generated and recycling

and resource reuse rate (Nissha Group in Japan)

The total amount of waste generated by the Nissha Group in
Japan in the fiscal year ended December 2022 was 13,606t, adecrease of approximately 22% compared to the 17,465t in thefiscal year ended December 2021. In addition, emissions fromincineration and landfill waste accounted for 22t, a decrease of
approximately 12% from the 25t generated in the fiscal year

ended December 2021. The source of the reduction was a decrease in waste material output by Nitec Industries, Inc. (NII), a
production base for the Industrial Materials business, and Nitec
Precision and Technologies, Inc. (NPT), a production base for theDevices business.
Our recycling and resource reuse rate for the Nissha Group in Japan was 99.8%, allowing us to successfully meet our target of zero
emissions (a recycling and resource reuse rate of 99.5% or above).

■ Total amount of waste generated and recycling

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 five main risks.
• Accidents and disasters caused by waste and waste converted
into valuable resources (including at treatment contractors)

and resource reuse rate (Nissha Group overseas)• Environmental pollution and violation of laws caused by inappropriate waste treatment

The total amount of waste generated by the Nissha Group overseas in the fiscal year ended December 2022 was 13,601t, an
increase of approximately 4% over the 13,122t from the fiscal
year ended December 2021. This was mainly due to an increasein waste material output at Nissha Metalizing Solutions (NMS),
which produces sustainable materials (metallized paper) for the
Industrial Materials business, and at Nissha Medical Technologies(NMT), which handles production for the Medical Technologies
business.

• Leakage of confidential information from waste and waste
converted into valuable resources

The recycling and resource reuse rate for major overseas Nissha
Group production bases was 86.6%, an improvement of 1.4
points from 85.2% in the fiscal year ended December 2021.

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• Refusal by waste disposal company to pick up waste• Revocation of waste disposal company licenses
To alleviate these risks, we are working on safety managementof waste 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
toward thorough waste separation and management. At the
Nissha Group production bases in Japan, emergency response
drills in the event of a leak are conducted once a year to prevent
environmental pollution from liquid waste from the perspectiveof preventing accidents and disasters. Furthermore, even small
quantities of chemicals and spray cans are thoroughly checked
for waste properties and monitored to prevent spillages duringtransport and accidents at treatment facilities.

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and Productivity Improvement

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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 make use of checklists. In addition, we have inplace standards for managing waste and waste converted into
valuable resources that contain confidential information, andpromote management in association with our information security management system (ISMS).
Furthermore, we are monitoring the progress of waste disposal bystrengthening the use of electronic manifests, and in preparation
for delays, we are building a structure that allows us to respondquickly, such as by strengthening communication with contractors that have suspended disposal and reviewing waste disposal
contractors.
In addition, at the Kyoto Global Headquarters, there is a need toaddress waste risks associated with business changes, such aschanges in the content of waste materials generated as researchand development by the business development division progress.
In particular, before handing over chemical waste, we strictly
manage the discharge of chemicals by preparing waste material
lists and thoroughly checking Safety Data Sheet (SDS), and wehave been in even closer communication with industrial waste
disposal contractors to ensure waste is disposed of safely.

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RightsHuman
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and Productivity Improvement

Governance

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10. Management of Chemical Substances and Environmental Risks
10-1 Approach to Chemical Substances
Used in Products and Their Production Processes
The majority of the Nissha Group's products are incorporated
into products manufactured by our customers, and since thespecifications differ for each product, there is no equivalent ofa general-purpose product. In addition, many of the materials
used in our products are specified by customers. They correspond to “Material” of the 4M (Man, Machine, Material, Method),which are the four elements for proper quality control. As thisis a customer-approved matter, the chemical substances used(contained) in materials are also the customersʼ confidential information. For this reason, we cannot disclose the chemical substances used in our products together with the product name on,for example, our website. Such information is generally disclosed
by our customers through their own products, while we disclose
information on chemical substances used in our products by providing Safety Data Sheets *1 (SDS) and other information to ourcustomers.
*10-1 and 10-2 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.
*1. A document containing information on the properties and handling of the chemical concerned

10-2 Management of Chemical
Substances Used in Products
10-2-1 Establishment and 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 to control chemical substancesused in our products and their production processes.
These standards reflect the laws and regulations of relevant countries and regions, as well as standards for customers' use of chemical substances based on industry norms and standards such as
the GADSL (Global Automotive Declarable Substance List), which
is a list of environmentally hazardous substances common to theautomotive industry, and provide comprehensive management of
all chemical substances used in our products. Whenever new candidate substances for regulation are added, such as substances ofvery high concern under the REACH Regulation, or whenever the
relevant laws or regulations are amended, or our customersʼ chemical substances criteria change, we identify the differences from ourcriteria in order to adapt to these changes.
The Nissha Control Criteria for Chemical Substances in Purchased
Products are revised on an annual basis, taking these differences
into account, and explanatory meetings are held when major revisions are made to inform the relevant departments. The details of
the control criteria indicated in these standards are as follows.

Nissha Sustainability Report 2023

1. Usage-prohibited substance: Substances for which we prohibit
either deliberate or not deliberate use. Inclusion of impurities isalso prohibited.
2. Deliberate usage-prohibited substance: Substances for which we
prohibit deliberate use. There are restrictions on the inclusion of
impurities.
3. Regulated substance: Substance which requires a content reportfrom suppliers to Nissha.
The Nissha Group considers the entire life cycle of the products weprovide to our customers. In addition, in promoting the reductionof environmental impact and consideration for human health, we
intend to place importance on transactions with suppliers who workon products with low environmental impact, biodiversity, and consideration for the environment. In order to comply with laws andregulations concerning chemical substances, we have established amanagement promotion system and are working to investigate andcontrol chemical substances used in our products.

10-2-2 Management System
The points required to comply with the Nissha Control Criteria
for Chemical Substances in Purchased Products are listed below.
We are putting measures into place at each stage of the process,building a comprehensive countermeasures system.
• Warranty system based on cooperation with material suppliers
The following documents are submitted once a year by suppliers who provide us with materials for mass production.
‒ Certificates of conformity to the Nissha Control Criteria

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‒
‒
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Nissha Group
Sustainability

Environment

Third Party
Verification

for Chemical Substances in Purchased Products
Reports on the inclusion of prohibited substances
Reports on the inclusion of chemical substances in productsContent information
ICP data
Written pledges• 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 non-compliant substances• Provision of information accompanying sales to customers‒ Provision of information on chemical substances used in
products‒ Registration in International Material Data System (IMDS)
and the customerʼs management system‒ Issuance of SDS
To promote management of the chemical substances used in
our products, the environmental and safety management division at head office functions as the secretariat and works withthe product design and development, quality assurance, and procurement and sourcing divisions at each business unit to inspect
the state of management of chemical substances, including differences with the Nissha Control Criteria for Chemical Substances in Purchased Products. In addition to new products, whenselecting new materials or changing materials in the design anddevelopment stages, we conduct design reviews (DR) and assess
compliance with the Nissha Control Criteria for Chemical Substances in Purchased Products while considering the impact on

Nissha Sustainability Report 2023

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Resources

Fair Operating Practices/ Local Communities

human health and the environment. This system then ensuresstrict control of chemical substances, from the design stage tothe final product, responding to changes in the needs of society
and the demands of our customers for the use and managementof chemical substances.
We do not use any chemical substances that fall under the usage-prohibited substances category in our products. With regard
to the management of chemical substances used in our products, we have shifted to maintenance management by establishing and operating a management system, and we do not currently operate a reduction plan that involves the establishment of
Key Performance Indicators.
On the other hand, we are promoting compliance with the Nissha Control Criteria for Chemical Substances in Purchased Products by setting an environmental perspective at the design anddevelopment stage, which is one of our environmental targets.
In the fiscal year ended December 2022, there were no cases inwhich chemical substances used in our products were recalledfrom the market or reshipped with changing in materials.

10-2-3 Comprehensive Response to Chemical Substances of Concern■ 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.

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

*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.

Nissha has been working on either not using or using fewer
hazardous chemical substances used in our products since thefirst edition of the Nissha Control Criteria for Environmentally
Controlled Substances was established in 2007, leading up to
the current 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 environmentally controlled substances since the first edition
by complying with customer requests in accordance with thedirective. Although Annex III (exemption list) was amended by aEuropean Commission Decision (effective January 2013), noneof the relevant chemical substances are used in 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]

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SocialThird Party
Verification■ Compliance with REACH Regulation
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.
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, we haveconfirmed that we do not currently use SVHCs in our core products (molded products). This is also stated in the SDS and otherdocuments that we provide in response to customer requests.

Human
RightsNissha Sustainability Report 2023

Fair Operating Practices/ Local Communities

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

List of target substances• 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)

Deliberate
usage-prohibited
substance*2■ Compliance with other regulations
As stated above, Nissha operates in compliance with the RoHS
and REACH directives, as well as a wide range of other regulations including TSCA (U.S. Toxic Substances Control Act), California Proposition 65 and GADSL. To comply with the U.S. TSCAPBT regulations, we are addressing the prohibition of the manufacture, processing, and commercial distribution of five typesof PBT substances (decaBDE, PIP (3:1), 2,4,6-TTBT, PCTP, and
HCBD) and parts and products containing such substances (theregulation on processing and commercial distribution of PIP (3:1)
is scheduled to come into effect on October 31, 2024).

Human
Resources

Regulated
substance*3• 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 PBT substances• TSCA preferred substances• POPs Convention residual organic pollutants• 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)*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

Governance
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and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

10-3 Chemical Substances Used in
Production Processes
10-3-1 Operation of the Nissha Control Criteria for
Chemical Substances in Purchased Products
In addition to the chemical substances used in our products, we
also regulate the chemical substances used in our production
processes in accordance with the Nissha Control Criteria for
Chemical Substances in Purchased Products. These include thesubstances 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 ofSpecific Chemical Substances in the Environment and Promotionof Improvements to the Management Thereof (PRTR Act).
As an example, when Nitec Precision and Technologies, Inc.
(NPT) uses chemical substances in its production processes, we
examine the substances based on prescribed procedures anduses chemical substances in consideration of the environment,
health and safety.

10-3-2 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 2022, the Nitec Industries, Inc. (NII)
Koka Factory worked to reduce the use of PRTR substances andorganic solvents other than PRTR substances. However, it failed

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SocialThird Party
Verificationto achieve its target of a 1% reduction year-over-year.
The Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
achieved results by reducing the amount of chemicals used in its
wastewater treatment facilities.

Human
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that 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.

Fiscal year

FY2020

FY2021

FY2022

Assessment

○

○

△

10-4 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 2022, 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 ensure

Nissha Sustainability Report 2023

10-5 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.

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We also carry out regular training, and review the response
procedures as necessary.
In addition to its existing emergency drills, the Nitec Industries,
Inc. (NII) Koka Factory has been conducting emergency drills at
the factory in cooperation with suppliers in response to a chemical leak* that occurred in 2021.
*There was one leakage incident, but it did not lead to a serious environmental impact.

In the fiscal year ended December 2022, there were no serious
environmental accidents or violations of environmental regulations at the Nissha Group, and no penalties or fines were incurred.

• 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.

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10-6 Prevention of Water Pollution
We have set our own strict standards and regularly conduct voluntary surveys of wastewater quality to prevent water pollution.
The table on the right shows the results of measurement ofwastewater quality at our core production sites.
*1. Water Pollution Control Act*2. Law Concerning Special Measures for Conservation of the Environment of the Seto
Inland Sea

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Governance■ Nitec Precision and Technologies, Inc. (NPT) Himeji Factory

Items measured

Agreement
value*2

Regulatory
value*1

Discharged water

5,200

5,000

Voluntarystandard
5,000

FY2020
Unit

Analysis
value

3

m

FY2021Analysisvalue

Evaluation

FY2022

Evaluation

Analysisvalue

Evaluation

4,156

〇

4,150

〇

3,854

〇

5.8

5.8

6.5

6.8

〇

6.9

〇

6.8

〇

〜 8.6

〜 8.6

〜8

7.5

〇

7.5

〇

7.4

〇

BOD

120

10

9

mg/l

4.0

〇

3.7

〇

2.6

〇

COD

120

10

9

mg/l

5.2

〇

4.4

〇

4.8

〇

150

5

4.5

mg/l

1.9

〇

2.6

〇

1.1

〇

1

0.9

mg/l

<0.5

〇

<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

<0.005〇<0.005〇<0.005〇

Copper

3

0.5

0.4

mg/l

0.05

〇

0.02

〇

0.01

〇

Zinc

2

1.5

1.2

mg/l

<0.01

〇

<0.01

〇

<0.01

〇

Soluble iron

10

0.15

0.08

mg/l

0.03

〇

0.03

〇

0.03

〇

Soluble manganese

10

0.05

0.045

mg/l

0.04

〇

0.04

〇

0.02

〇

Chromium

2

0.02

0.02

mg/l

<0.02

〇

<0.02

〇

<0.02

〇

Nitrogen

60

10

9

mg/l

4.2

〇

4.5

〇

4.3

〇

Phosphorus

8

1

0.45

mg/l

0.02

〇

0.03

〇

0.02

〇

■ Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
Items
measuredpH

Voluntarystandard

5.8 〜 8.6

6.2 〜 8.2

FY2020
Unit

Final effluent(Average)

FY2021

Final effluent(Maximum)

Final effluent(Average)

FY2022

Final effluent(Maximum)

Final effluent(Average)

Final effluent(Maximum)

7.5

〇

7.7

〇

7.4

〇

7.7

〇

7.6

〇

7.7

〇

24.0

〇

BOD

160 or less40 or less

mg/l

23.4

〇

40.0

〇

23.3

〇

35.0

〇

17.4

〇

COD

160 or less80 or less

mg/l

33.5

〇

47.0

〇

37.7

〇

44.0

〇

25.8

〇

36.0

〇

SS

200 or less20 or less

mg/l

6.3

〇

23.0

〇

6.0

〇

10.0

〇

7.7

〇

21.0

〇

30

15 or less

mg/l

0.6

〇

0.9

〇

0.5

〇

0.5

〇

0.5

〇

0.5

〇

n-hexane derived
substances

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Regulatory
value(Prefecture)

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Sustainability

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Environment

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

List of PRTR-Designated Chemical Substances

In FY2022, the number of substances subject to PRTR Law notification was nine at three factories.

■ Nitec Industries, Inc. (NII) Koka Factory
PRTR
No.

Name ofchemical substance53

Ethylbenzene

80

XyleneUnit: kg

FY2020Discharge
volume into theatmosphere

FY2021

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

FY2022

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

Average over the 3 years

Volume transferred
Reportingto industrial waste
required /processing companies not required

Discharge
volume into theatmosphere

Volume transferred
to industrial waste
processing companies

710

286

〇

2,273

928

〇

1,211

494

〇

1,398

569

15,745

6,431〇

10,524〇

12,022

4,910〇

12,764

5,213
283

88

Hexavalent chromium compounds

0.1

0

〇

0.1

4,298
850 *

〇

0.1

0

〇

0

296

1,2,4-Trimethylbenzend

25

10

ー

59

24

ー

1

0.3

ー

28

11

300

Toluene61,53525,134〇

106,873

43,652〇

57,72823,579〇75,37930,788392

N-hexane

601

245

〇

258

105

〇

0

0

〇

286

117

*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
PRTR
No.

Name ofchemical substance

Unit: kg

FY2020Discharge
volume into theatmosphere

FY2021

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

FY2022

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

Average over the 3 years

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

Volume transferred
to industrial waste
processing companies

71

Ferric chloride

0.0

0.0

ー

0.0

0.0

ー

0.0

0.0

ー

0.0

0.0

272

Water-soluble copper salts (excluding complex salt)

0.0

1,820.2〇

0.0

2,677.4〇

0.0

2,491.4〇

0.0

2,329.7

453

Molybdenum and its compounds

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

■ Nitec Precision and Technologies, Inc. (NPT) Kaga Factory
Unit: kg

PRTR
No.

Name ofchemical substance

FY2020Discharge
volume into theatmosphere

FY2021

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

FY2022

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

Average over the 3 years

Volume transferred
to industrial waste
processing companies

Reportingrequired /not required

Discharge
volume into theatmosphere

Volume transferred
to industrial waste
processing companies

71

Ferric chloride

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

272

Water-soluble copper salts (excluding complex salt)

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

〇

0.0

0.0

627

Diethylene glycol monobutyl ether

ー

ー

ー

ー

ー

ー

0.0

0.0

〇

0.0

0.0

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10-8 Prevention of Air Pollution
10-8-1 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 the last three years are as follows.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Kyoto Headquarters
Unit

FY2020

FY2021

FY2022Average over the 3years

Compliance

NOx

ppm

30

25

27

27

〇

Soot and dust

g/m³nLess than0.001

0.002

Less than 0.001

ー*〇

Sulfur dioxide

ppm

n/a

n/a

n/a

n/a

n/a

Carbon monoxide

ppm

n/a

n/a

n/a

n/a

n/a

*Not calculated■ Nitec Industries, Inc. Koka Factory

10-8-2 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.

Unit

FY2020

FY2021

FY2022Average over the 3years

Compliance

NOx

ppm

40

32

29

34

〇

Soot and dust

g/m³nLess than 0.01

Less than 0.01

Less than 0.01

Less than 0.01〇

Sulfur dioxide

ppm

n/a

n/a

n/a

n/a

n/a

Carbon monoxide

ppm

n/a

n/a

n/a

n/a

n/a

■ Nitec Precision and Technologies, Inc. Himeji Factory
Unit

FY2020

FY2021

FY2022Average over the 3years

Compliance

NOx

ppm

33

34

31

33

〇

Soot and dust

g/m³

Less than 0.001

Less than 0.001

Less than 0.001

Less than 0.001〇

Sulfur dioxide

ppm

n/a

n/a

n/a

n/a

n/a

Carbon monoxide

ppm

n/a

n/a

n/a

n/a

n/a

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

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Sustainability

Environment

SocialThird Party
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Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

11. Water Resources11-1 Basic Concept*The "Physical Risk (Quantity)," "Physical Risk (Quality)," and "Reputation Risk" items are

11-2 Target and Progressscored, and the risk level is evaluated on a 5-point scale: Low (0-1), Low-Medium (1-2),
Medium-High (2-3), High (3-4), and Extremely-High (4-5).

The Nissha Group's Environmental Policy is to aim for businessdevelopment and the realization of a sustainable society throughenvironmentally conscious corporate activities. In addition, theEnvironment Principles declare that we shall aim to construct a
recycling society and that we shall value biodiversity and prevent
pollution while co-existing with nature, thereby indicating ourstance towards the Nissha Group's business activities. We areworking to reduce water consumption through appropriate use,water recycling (reuse), and more efficient water use.
Approximately 95% of both water intake and wastewater discharge within the Nissha Group comes from activities at ourdomestic production bases. The majority of this intake and discharge occurs at the Nitec Precision and Technologies, Inc. (NPT)
Himeji and Kaga factories, which are the production bases forthe Devices business.
The production process for film touch sensors, the core productof the Devices business, requires good quality water to maintainproduct quality. In addition, we have established and are operating the Nissha Control Criteria for Chemical Substances in Purchased Products for the management of chemical substancesused in production processes, which reflect relevant laws, regulations and customer standards, and we have established strict voluntary standards and conduct regular voluntary measurements
to thoroughly control wastewater quality.

The Nissha Group in Japan has set the following target for water
use and conduct annual evaluations.
Refer to 12. Environmental Objectives and Status of Achievement (Nissha Group in Japan)
TargetReduce use of water by improving production efficiency andsaving water

FY2020

FY2021

FY2022〇〇〇

We decreased the water usage quantity by consolidating factories
at the NPT Kaga Factory and achieved over 1% of water usage
reduction. Additionally, we were able to decrease the quantityof water used at the NPT Himeji Factory through water conservation efforts there. We continue to reduce water consumption
and save water for miscellaneous use by improving production
efficiency at our factories. At the Global Headquarters, repairs toleaking pipes reduced water consumption waste.

11-3 Understanding Water Stress Areas
We use Aqueduct*, a global tool for water risk assessment developed by the World Resources Institute (WRI), to assess water risk
at our production bases.
In 2022, the “Overall Water Risk” at domestic production bases
was Low (0-1) or Low - Medium (1-2).

Nissha Sustainability Report 2023

The NPT Himeji and Kaga factories, both of which have relatively
high levels of water consumption in the Nissha Group, fall into
the Low-Medium (1-2) risk category. In terms of water intake
and use, we do not have a significant impact on local water resources, but we will continue to work to reduce our impact on
the environment by setting targets to reduce water use and devising an infrastructure.

11-4 Management of Water Intake
and Wastewater
All of the Nissha Group production bases in Japan use water supplied by a third-party (tap water and industrial water).

■ NPT Himeji Factory
The NPT Himeji Factory uses industrial water (for use in production) and tap water (for general use) supplied by Hyogo Prefecture. Wastewater is discharged to the Seto Inland Sea via anearby river after being treated at the factory. The area where
the factory is located is subject to the Law concerning Special
Measures for Conservation of the Environment of the Seto Inland Sea, which is stricter than the Water Pollution Prevention
Act. To comply with the law, the factory operates a wastewater
treatment facility using activated carbon adsorption. In addition,
we operate and manage water quality by establishing voluntarystandard values for water quality control that are stricter thanthose set by laws and regulations.

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The NPT Kaga Factory uses tap water supplied by Ishikawa Prefecture. Wastewater is purified to a level that meets effluent
standards at the factory's wastewater treatment facility before
being discharged into the Sea of Japan via a nearby river. As at
the Himeji Factory, we operate and manage water quality by establishing voluntary standard values for water quality control thatare stricter than those set by laws and regulations.

11-5 Initiatives for Appropriate
Water Use

Human
Rights• During the production process, products are washed using
purified water to ensure that no impurities remain on the
products. While a single rinse tank requires a large amountof water, increasing the number of rinse tanks to two or
three (by making tanks multi-level) can reduce the amountof purified water usage. This method is known as multistage countercurrent washing or cascade rinsing. The Kaga
Factory uses this method to wash products with a small
amount of water by removing impurities in stages which
results in significant water savings.

Fair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Kyoto Headquarters

2. Replacing aging water pipes• We are replacing aging water pipes to prevent leaks andreduce water usage. At the end of 2022, some of the water
pipes were upgraded from conventional PVC pipes to pipesthat can withstand earthquakes and other disasters.

During monitoring of monthly water usage, we noticed that
there were months in which usage increased more than expected. Upon investigation, we found that the water pipes were leaking due to aging, and we replaced them.

11-6 Water Data
The amount of water usage and water discharge by the Nissha Group are shown in the table below.

■ NPT Kaga Factory
1. Reduction of water usage

Human
Resources

Governance

Water usage

Water discharge

Items

Unit

Boundary

FY2018FY2019FY2020

FY2021

FY2022

Tap waterm3

Production bases in Japanand overseas

1,252,000

1,291,000

1,287,000

1,249,000

993,000

Underground waterm3

Production bases in Japanand overseas

10,000103,000

40,00046,00049,000Industrial waterm3

Production bases in Japanand overseas

2,158,000

1,943,000

1,725,000

1,670,000

1,549,000

m3

Production bases in Japanand overseas

3,334,000

3,305,000

3,033,000

2,594,000

2,342,000• The filter cloth in the sludge dewatering press (filter machine) is washed periodically to prevent clogging. Whenwashing the cloth, we reuse purified wastewater from thefactory as cleaning water to reduce water consumption.

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Governance
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Governance

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12. 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.

12-1 Initiatives and Achievements in FY2022
1. Prevention of pollution
TargetEnvironmental Objectives
Period: FY2018 - FY2023
Scope: Nissha Group in Japan ISO14001 certification sites (“certification sites”)

Assessment Definitions

FY2020

FY2021

FY2022(1) Maintain zero environmental accident (accidents that affect areas outside the factory)

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.

(1) There was one leak accident in the fiscal year ended December 2022. A delivery company ʼs truck
experienced a fuel leak at Nissha FIS, but it did not have a significant environmental impact.
(2) As one of our efforts to reduce environmental risks, we conducted a chemical leakage response
drill. As a result, the factory's environmental risk “potential” (the value in the environmental risk
assessment) has been reduced by more than one level.

NPT: Nitec Precision and Technologies, Inc.
NCI: Nissha Printing Communications, Inc.

2. Mitigation of climate change
TargetFY2020

FY2021

FY2022(1) Reduce CO2 emissions rate (basic unit)*1 by 6% or more*2
by the fiscal year ending December 2023

〇

〇

〇

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

〇

×

×

*1. CO2 emissions rate (basic unit) = CO2 emissions / Production volume (depend on the sites)*2. Reference value: Results in fiscal year ended December 2017

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Human
RightsHuman
Resources(1) By the fiscal year ended December 2022, 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. In addition to various energy-saving initiatives, we are converting to renewableenergy. The NII Koka Factory and NPT Kaga Factory obtain 100% and 10% of their electricity,respectively, from renewable energy sources.
(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 (NII Koka Factory, and NPT Kyoto, NCI) achieved at least a
1% reduction compared to the previous fiscal year. However, three locations (Global Headquarters, NPT Himeji Factory, NPT Kaga Factory) did not achieve the target.

FY2020

FY2021

FY2022(1) Reduce waste generation rate (basic unit) *1 by 6% or
more*2 by 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

△

×

*1. Waste generation rate (basic unit) = Waste generation / Production volume (depend on the sites)*2. Reference value: Results in fiscal year ended December 2017

(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 2022, four out of the six locations (NPT Himeji Factory, NPT Kaga
Factory, NPT Kyoto, NCI) did not achieve the target, and the company-wide evaluation was set to" × ". The main reason for NPT's failure to meet its intensity target is the decrease in production
volume.

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

(2) Targets are set according to the characteristics of each factory. For the fiscal year ended December 2022, one out of the six locations (NII Koka Factory) achieved at least a 1% reduction
compared to the previous fiscal year. However, five locations (Global Headquarters, NPT Himeji
Factory, NPT Kaga Factory, NPT Kyoto, NCI) did not achieve the target.
(3) The Nissha Group in Japan as a whole achieved a recycling rate of 99.8%, and has maintained
zero emission of waste (a recycling and resource reuse rate of 99.5% or more) as in the previous
fiscal year.
(4) Although we continued to reuse waste material as usable material due to enhanced separating of
packaging material at the NII Koka Factory, we were not successful in gaining major cost reductions.

4. Reduction of water usage

3. Reduction of waste
TargetFair Operating Practices/ Local Communities

GovernanceTargetReduce use of water by improving production efficiency andsaving water

FY2020

FY2021

FY2022〇〇〇

We decreased the water usage quantity by consolidating factories at the NPT Kaga Factory andachieved over 1% of water usage reduction. Additionally, we were able to decrease the quantity of water used at the NPT Himeji Factory through water conservation efforts there. We continue to reducewater consumption and save water for miscellaneous use by improving production efficiency at ourfactories. At the Global Headquarters, repairs to leaking pipes reduced water consumption waste.

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

FY2020

FY2021

FY2022〇〇△At the NPT Kaga Factory, we achieved the reduction of chemical substances usage with the amountof drainage water treatment agent through consolidating factories.

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The NII Koka Factory did not achieve the target of a 1% reduction from the previous year due to thedecrease in production volume, although we continued to reduce the use of PRTR-designated substances and organic solvents which do not contain designated substances.

6. Environment-conscious design
TargetFY2020

FY2021

FY2022(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/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

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 assessments (LCA), and incorporate
the reduction of environmental impact at the product design stage. In addition, they are moving
ahead with the development and mass production of products that contribute to reducing environmental impact, such as the use of sustainable materials. Nissha FIS, Inc. also designs anddevelops parts that contribute to environmentally-friendly customer products, such as hydrogendetectors and coolant sensors used in fuel cell vehicles.
(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

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FY2020

FY2021

FY2022

〇

〇

〇

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Sustainability

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SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

13. Human Rights
13-1 Basic Policy

13-2 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 human resources are the driving force for improving corporate value, and has identified “respect for human rights” as one of our materiality. A task force has been established under the Sustainability Committee to deal with the themes of "diversity, human resource
development, labor and human rights" and is working to address respect for human rights at theGroup's suppliers. For other important human rights risks, a Labour and Human Rights Subcommittee has been established under the Risk Management and Compliance Committee, which is working
to reduce these 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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13-3 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 2022, the ESG Task Force
worked on the materiality of “respect of human rights” by setting“reduction of labor and human rights risks” as its strategic itemand “zero child labor and forced labor at the Groupʼs primary suppliers” as a key performance indicator/action item.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

with and so on. Internal audit findings are reported through thereport line, and the Labor and Human Rights Subcommittee provides support to production bases, as necessary, so that corrective
action can be taken. The results of the internal audit conductedduring the fiscal year ended December 2022 were favorable, withno major findings relating to issues such as forced labor.

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

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Dataand 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 and to create an environment where trainees can always
ask for help if they have any questions.
Despite the COVID-19 pandemic, six technical interns completed their training in the fiscal year ended December 2022
and returned to their home countries. We hope that many
young people will acquire skills and grow as world-class humanresources while experiencing different cultures, and we will continue to support them in this endeavor.

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 specificto affiliated companies.
Furthermore, we conduct internal audits once a year at major
Nissha Group production bases in Japan to check compliance withlaws and regulations and the RBAʼs code of conduct, etc. Specifically, in addition to checking whether the salaries paid irrespectiveof employment categories such as full-time, contract, or temporary
employees, etc. meet the minimum wages set by the prefectural
governments, and whether working hours and overtime are correctly reflected in wages in compliance with laws and regulations
and the RBA, we also check whether items which have been pointed out and corrected in previous audits continue to be complied

Nissha Sustainability Report 2023

Strawberry picking at tourist attractions near the workplace

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,

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Environment

SocialThird Party
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Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

13-4 Harassment Prevention

13-5 Relationship with Labor Union

We at the Nissha Group establish a set of Harassment Prevention Regulations, which prescribe measures to prevent various
forms of harassment in the workplace, with the aim of realizing
sound workplace environments in which all employees can live
up to their full potential. As a structure for promoting harassment prevention, we designate chief promoters of harassment
prevention at each base and we have established an external
hotline consultation service (Refer to 28-6 Hotline Consultation
Service). The contact information 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 4
consultations with hotline consultation service during the fiscal
year ended December 2022 and all consultations have been addressed.

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 2022, there
were no significant violations of freedom of association.

We also provide annual e-Learning training to all employees toprevent harassment, in addition to providing training for chief
promoters of harassment prevention to solve problems and prevent harassment, and discuss and implement measures for further improvement.

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 2023, there were 1,051 members). From April 1,
2023, employees of Nitec Precision and Technologies, Inc. canalso join. The vision of the Nissha Crew Alliance is “realizing newhappiness ” 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.
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 sharesinformation on the management of the Nissha Group. Furthermore, the labor and management offices strive to prevent labor

Nissha Sustainability Report 2023

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

problems by regularly sharing employeesʼ opinions on the working
environment and the working hours situation. During the fiscal
year ended December 2022, the Management Council met eighttimes, including regular bi-monthly meetings and ad-hoc meetings. In addition, the labor and management offices strive to prevent labor problems by sharing employeesʼ opinions on the working environment and the working hours situation once a month.
Furthermore, when changing important labor conditions of the
Nissha Group in Japan, the company engages in communication
with the union in addition to regular consultations, with the aimof reaching an agreement satisfactory to both parties. During
the fiscal year ended December 2022, we shared opinions onrevisions to the retirement pay system based on the new humanresources system, the award system, and new and diverse work
style initiatives, and we cooperated in improving existing systems
and formulating new measures. In January 2023, as the trend in
rising prices also became apparent in Japan and the momentum
for wage increases grew, labor and management agreed to raise
the starting salary for new graduates and salary levels.
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 2022, 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.

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14. Human Resources System
14-1 Policy

14-2 New Human Resources System

We at Nissha Group recognize that human resources are the driving force for improving corporate value.
With the start of the 7th Medium-term Business Plan in the fiscal year ended December 2021, we haveformulated 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 this policy.

Based on the idea that company growth leads to employee growth, and employee growth tocompany growth, the Group has overhauled its human resources system, which still had elementsof seniority-based hierarchy, and started operating a new system focused on roles and abilities inline with the 7th Medium-term Business Plan (FY2021–FY2023).

Human Resources Policy
Nissha Group aims for growth both for the company and employees through diverse capabilities
and passion, seeing changes in the business environment as opportunities for growth.
1. We shall develop employees who embody Nissha Philosophy and contribute to society
through our business activities.
2. We shall respect diversity of employees and utilize their individuality and strengths.
3. We shall emphasize global teamwork to achieve results.

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 lengthof service. In the human resources system for general employees, we have greatly improved thetreatment 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 directthese 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
their position, and receives feedback from their supervisor on the gaps with the abilities actuallydemonstrated in the semi-annual performance review. This encourages the growth of each
employee, which in turn leads to further growth for the company.

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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① Diversity

14-3 ESG Task Force Initiatives
The Nissha Group has set “ utilizing diver se human resources and developing global andmanagement human resources” and “ respect for human rights”, as social (S) material issues
to realize our Sustainability Vision. In order to accelerate our efforts in these areas, we haveestablished task forces under the Sustainability Committee to address three themes, (1) diversity, (2)human resources development, and (3) labor and human rights. 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 in three years (Medium-term Vision), and backcastingfrom these, we set annual activities targets and work to carry them out.
Key Performance Indicators andAction Items for 2023

Fair Operating Practices/ Local Communities

Governance

Key Performance Indicators andAction Items for 2030

1. Diversity

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

Female manager ratio
Global consolidated: 25%
Nissha non-consolidated: 17%

2. Human
resourcesdevelopment

Selection rate of leader candidates
Nissha non-consolidated: 36%

Selection rate of leader candidates
Nissha non-consolidated: 50%

3. Labor andhuman rights

0 incidents of child labor or forced laborat primary suppliers in regions with highrisks of labor and human rights (Central
and South America, Southeast Asia andGreater China).

Identify audit targets based on annual
purchasing results and continue toperform audits
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 2022, 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 corporate growth by providing full training programs and challenging
growth opportunities. In particular, in order to increase our pool of management and strategic
personnel who will lead the management of the entire company and its businesses, we have set,
as a key performance indicator, the attendance rate of employees at the Nissha Academy Business
School (beginner and intermediate levels) as the "selection rate of leader candidates”. We have set a
goal of increasing the selection rate of leader candidates to 50% (Nissha non-consolidated basis) by
2030, and are working on systematic training.

③ Labor and human rights
We are working to "understand and reduce human rights risks" at Nissha Group domestic andoverseas bases and their primary suppliers. In the fiscal year ended December 2022, we conducteda CSR survey of 95 of our primary suppliers in regions* with high labor and human rights risks, andconfirmed that there was no use of child labor or forced labor.
Refer to 13-3 Initiatives Related to Labor and Human Rights* Areas identified by the ILO (International Labour Organization) as having high labor and human rights risks: Central and South America,
Southeast Asia and Greater China

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14-4 Talent Management System
We have introduced a talent management system to grasp
the abilities of each employee and make the most of theirindividuality and strengths. The talent management system
records employee backgrounds, evaluations, and results ofengagement surveys and self-assessment. This data is then used
to develop and implement various measures.

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

expectations and evaluations when setting goals at the beginningof the term and when conducting evaluations at the end of theterm. We place emphasis on dialogue for mutual understanding,and devise ways to ensure more fair and convincing evaluations
and treatment.

14-6 Wage Management

I n t h e f i s c a l y e a r e n d e d D e c e m b e r 202 2 , w e b e g a n
implementing personnel evaluations on the system, whichenables us to monitor progress in real time. The system has
become a useful information tool for management, allowing
super visors at the new location to inquire about the past
personnel evaluations of transferred employees. We will continue
to collect and visualize employee information to promote databased talent management.

Wages and other compensation for labor are appropriately
stipulated in the wage rules of each affiliated company and inindividual contracts in accordance with the laws and regulationsof each country. The Nissha Group makes no distinctions basedon age, gender, or other factors.

14-5 Fair Evaluation and Treatment■ Nissha Co., Ltd.

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 ʼ s management strateg y
and the mission of the organization to which they belong,and “ behavior evaluation,” which focuses on demonstration
capabilities required to create results. The results are reflected inbonuses, salary increases, promotions, and other benefits. We
present clear evaluation criteria to employees and employees
me e t w ith their sup er v is or s to re cei ve fe e dback on our

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The treatment of full-time workers is the same for male andfemale. The dif ference is due to dif ferences in the grade
structure due to the different average lengths of service between
male and female.
In addition, non-regular workers include employees who aretreated differently, such as contract employees who are rehired
af ter mandator y retirement and employees working underindividual labor contracts. The main reason for the gap between
male and female is the large proportion of male in managerial
staff roles despite their non-regular employment.

The gap between male and female in terms of wages in the fiscal
year ended December 2022 is shown below. The figures show acomparison of female with a male wage set at 100.

Male

Female100

76.3

Full-time workers

100

77.7

Non-regular workers

100

56.2

All workers* Wages include bonuses, overtime allowance, commuting allowance, and family
allowance, etc.

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Governance

15. Respect for Diversity
The Nissha Group aims to be a company where all employees, regardless of nationality, gender,or age, can exercise their abilities to the full. One of our Shared Values that serve as the principleof employee behavior is Diversity and Inclusion, and we have declared that we welcome diverse
human 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.

■ Composition by employment status (Nissha Group, as of the end of December 2022)

Composition by employment status and gender
Permanent
Number15-1 Nissha Group Employee Composition

Temporary

Composition (%)

NumberComposition (%)

Male

3,362

63.1

865

60.2

Female

1,963

36.9

573

39.8

Total

5,325

―

1,438

―

* Figures exclude directors by a delegation agreement.

The diversity of the Nissha Group shows in our employee composition, and a variety of employees ofdifferent genders, ages, and nationalities are active. With the expansion of our activities across theglobe, about 60% of permanent employees work at Nissha Group companies outside Japan. Nissha
Group overseas bases are continuing to hire local employees and locally hired employees havebeen appointed to upper management positions, such as CEO, at 8 of the 17 major overseas groupcompanies.

Number of employees by region and gender
Area

Japan

Male

1,500

North America

690

365

Asia

Europe

319

415

461

568

314

205

Total

1,915

1,151

933

633

693

Nissha Sustainability Report 2023

GenderDirectors of
the Board*1

Corporate
officers

Male

8

12

1

Female100End of
FY2019

Male

8

12

1

Female100End of
FY2020

Male

8

11

Female10

End of
FY2021

Male

8

Female1

MaleFemale488

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

FiscalYear

End of
FY2018■ Composition by region (Nissha Group, as of the end of December 2022)

Central and SouthAmerica■ Employee Composition (Nissha Co., Ltd.)End of
FY2022Nisshafellows

Averageage*4

Averageyears ofemployment*4

Managerial
staff*2

Total employees*3

161

616

42.1

14.5

11

203

36.5

10.7

162

609

42.9

15.3

10

210

36.7

11.0

2

145

531

43.0

15.4

0

8

189

37.3

11.5

12

2

157

534

43.8

15.6

0

0

9

197

37.8

10.8

8

12

1

153

513

44.7

17.2

1

0

0

10

197

38.2

11.8

*1. Directors include Independent Outside Directors of the Board.
*2. Managerial staff exclude corporate officers.
*3. Employees exclude temporary employees.
*4. Average age and average years of employment indicate the average number of employees included in total employees.

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Environment

Human
RightsHuman
Resources■ Composition by age (Nissha Co., Ltd., as of the end of December 2022)
Age

18-19

20-29

30-39

40-49

50-59

Fair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

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15-2 Employment of Persons with Disabilities
60-69

Male

0

33

117

205

152

6

Female

2

39

76

56

23

1

■ Number of employees (Nissha Group)
FY ended Dec.
2018

GovernanceFY ended Dec.
2019

FY ended Dec.
2020

FY ended Dec.
2021

FY ended Dec.
2022

The Nissha Group is working to achieve the employment rate for people with disabilities at thecompanies with the number of employees that are subject to the employment rate system forpeople with disabilities set by the government. To ensure that employees with disabilities can workwith peace of mind, we provide support from outside specialists such as job coaches, help themdevelop their skills, 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.

Male

3,832

3,692

3,432

3,470

3,362

Female

2,012

2,026

1,958

1,939

1,963

Total

5,844

5,718

5,390

5,409

5,325

■ Legal employment rate and Nisshaʻs employment rate
End of FY2018(%)

End of FY2019

End of FY2020

End of FY2021

End of FY2022* Figures exclude temporary employees.

Of all permanent employees who left Nissha Group companies in Japan in the fiscal year ended
December 2022, 3.66% left for personal reasons.

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

End of
FY2022

Male

FemaleOf which mid-carrier employees

Total

Of which foreign
employees

Number

273

13

286

86

2

Composition
ratio (%)

95.5

4.5

―

30.1

0.7

Number

281

14

295

94

2

Composition
ratio (%)

95.3

4.7

―

31.9

0.7

Number

269

15

284

91

1

Composition
ratio (%)

94.7

5.3

―

32.0

0.4

Employment rate ofNissha

2.18

2.38

2.11

2.12

2.07

Statutory
employment rate

2.2

2.2

2.2

2.3

2.3

In the fiscal year ended December 2022, three new employees with disabilities were hired, but
the employment rate of persons with disabilities remained unchanged as some retired and others
returned their disability certificates.
We will continue to work systematically to achieve and maintain our target for the percentageof persons with disabilities employed by creating opportunities to hire and employ persons withdisabilities through strengthening cooperation with public employment security office and otherexternal organizations, creating a comfortable work environment, and promoting understanding of
employment of persons with disabilities in the workplace.

* Managerial staff exclude temporary employees.
* Figures as of December 31, 2020 and December 31, 2021 have been revised due to a review of the aggregation method in accordance withthe disclosure in our Annual Securities Report.

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15-3 Foreign Employees in Active Roles

15-4 Promotion of Women's
Advancement

The Nissha Group conducts recruitment activities regardless ofnationality. In our Group, where a diverse range of people plays
active roles, non-Japanese nationals account for more than
60% of all employees. The number of foreign nationals working
for the Nissha Group in Japan is increasing. We have set up a
worship room in our Kyoto Global Headquarters along with asmall purification facility to purify the body before worship.

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.

The total number of new graduates and mid-career hires and thenumber of newly hired foreign employees at Nissha Co., Ltd. isshown below.
Unit: Number of employees
Total
numberof hires

FY201921

New graduates

Mid-career

Total
numberForeignnationals

Total
numberForeignnationals

18

4

3

0

FY2020

20

12

0

8

0

FY2021

29

11

0

18

0

FY2022

37

12

1

20

0

Country

Malaysia,
Indonesia,
Vietnam,
Iran

Republicof Korea

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

Workplace
The Japanese Act on Promotion of Womenʼs Participation andAdvancement in the Workplace requires companies with 101 or
more employees to draft an action plan for promoting womenʼsparticipation in business. In the Nissha Group, five companies,
Nissha Co., Ltd., Nitec Industries, Inc., Nitec Precision andTechnologies, Inc., Nissha Printing Communications, Inc. andNissha Business Service, Inc. have formulated action plans thatspecify quantitative targets and the details of their initiatives.
I n l i n e w i t h t h e a c t i o n p l a n s b a s e d o n t h e Wo m e n ʼ sParticipation Act, moving forward, we will continue to upgrade
our initiatives so that all employees can live up to their fullpotential.

Refer to 14-3 ESG Task Force Initiatives

Female managers ratio
End of
FY2021Governancetraining items for each grade, and systematically developing
candidates for upcoming managerial staff positions throughpersonnel rotation.

Our Group has identified utilizing diverse human resourcesand developing global and management human resourcesa s a mater ialit y. To that end, we have made promoting
female advancement a strategic item and the ratio of female
managerial staff a KPI, for which we have set targets of 21% forglobal consolidated companies and 8% for Nissha on a nonconsolidated basis by 2023. In the fiscal year ending December
2023, several women will be appointed as managerial staff, andNissha expects the percentage to increase to more than 7% on a
non-consolidated basis.

End of
FY2020Quality Management / Efficiency
and Productivity Improvement

End of
FY2022

Forecast at theend of FY2023

Nissha Group (%)

19.4

20.0

21.5

21.0 〜 22.0

NISSHA (%)

5.0

5.4

5.9

7.0 〜 8.0

* Figures as of the end of FY2020 and the end of FY2021 have been revised due to a review of
the aggregation method in accordance with the disclosure in our Annual Securities Report.

The Nissha Group in Japan opened a career counseling office in
2021, where women can get support for career planning that
accommodates their life events. In addition, we are providing
challenging growth opportunities for female employees byenhancing selective training and company-wide common

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indicated that joining NMT has allowed him to gain experience
operating a variety of machines and to improve his English.
Anil is especially grateful for the positive work environment andfriendships with his colleagues.
Naweed Joyana, a member of the manufacturing department, justJenna Gimbar
VP Global Human Resources
Nissha Medical Technologies

celebrated his first anniversary since joining NMT in May 2023.
He has honed his skills through training and skill development,
and has demonstrated an aptitude for learning in a variety offields. Naweed is looking to grow further and hopes to advancehis career to become a machine operator. Naweed, who has a

Nissha Medical Technologies (NMT) is actively involved inbackground in automotive repair and painting, and previously

creating employment opportunities in the community. One such

worked in the engineering unit at a military base, brings a strong

opportunity that is particularly worth noting is the collaboration

work ethic to our team.

between NMT's Head Office in Buffalo, New York and Journey's

NMT is proud to be working with Journey's End Refugee Services

End Refugee Services, Inc. Journey's End Refugee Services isan organization with deep roots in the local community whose
mission is to accept refugees, regardless of origin or creed, andhelp them become healthy, independent and valuable membersof the community. The organization provides essential resources
and support to enable refugees to actively contribute to theircommunities on the western side of New York State. NMT
takes great pride in working together to create a more inclusive

based on our shared mission to provide employment opportunities
and support to refugees in our community. We believe in the
power of collaboration, cultural exchange, and personal growththrough the development of a diverse and inclusive workforce.
Anil Faizi and Naweed Joyana embody the success stories resulting
from such partnerships. NMT will continue to build partnerships
with local communities at each of its bases.

workplace by successfully employing refugees through thisprogram.
Through our partnership with Journey's End Refugee Services, wehave been able to connect with two individuals who have since
been hired by NMT. Anil Faizi is a machine operator and has been
one of our team members for over a year. When asked about his
experience at NMT and how it contributed to his growth, Anilspoke of his satisfaction at the opportunities offered to him. He

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16. Human Resources Development
16-1 Basic Concept
The Nissha Group in Japan offers a wide range of training
programs to realize our medium- to long-term growth strategy
and to suppor t employees' medium- to long-term careerdevelopment and promote their growth. These programs havebeen organized into an in-house university, Nissha Academy.
Specifically, we have established selective training programs todevelop candidates for the next generation of management,
rank-specific training programs that match the employee ʼsstage, function-based training programs to provide specialized
knowledge according to job type and duties, and career design
training programs tailored to employeesʼ life stage. The Nissha
Group overseas is also developing various training programs
under the Nissha Academy flag, based on the actual situationin each country and region. Through such human resources
development initiatives, the Group aims to see the company andour employees grow together.

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16-2 Training Systems■ 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
This training program is designed to systematically develop
human resources to lead the management of the entire company
and its businesses.
It covers the knowledge and skills involved in developing andimplementing business strategies. Participants who complete thetraining program will be actively provided with opportunities to
put what they have learned into practice, including participating
in projects and formulating medium-term management plans.
The Business School offers beginner (leaders in the workplace),intermediate (managerial staff), and advanced (senior managerial
staff) level programs. The beginner-level course is taught byin-house officers and managerial staff who have completed
programs at the Business School, and covers basic business
literacy and the Nissha Group's corporate philosophy system(Nissha Philosophy). The intermediate and advanced programs
are original programs that combine MBA-based lectures byprofessors from graduate schools of management with lectures
based on practical case studies by in-house instructors.

Nissha Sustainability Report 2023

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Resources

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

Governance
Quality Management / Efficiency
and Productivity Improvement■ Rank-specific training
Rank-specific training is provided at milestones such as whenentering the company, promoted, and appointed to certain
positions.

GRI Standards Content
Index / ESG Data

divisions to gain a wide range of experience, helping them togrow step by step.
Group training

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

Business unit
training

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

Factory training

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

Overseas trainee system
We have an overseas trainee system for developing young humanresources (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 thirdyear on and spend about one year in a local subsidiary. By
working at overseas 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.

GovernanceNew employee training
At the Nissha Group, the first three years after new graduatesenter the company are positioned as the initial training period. At
the start of this period, group training is conducted at all domestic Group companies. New employees who join Nissha Co., Ltd.
are assigned to their business units after group training, business
unit training, and factory training. Three years after joining thecompany, new employees are rotated across job categories and16-2

Environment
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Nissha Group
Sustainability

Environment

Third Party
Verification■ Function-based training
Training is provided to employees to allow them to acquire theknowledge and skills required for their job type and duties, suchas engineering, production, purchasing, etc.

Priority market skills training (reskilling)
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 in such areas and to fit our capabilities into the new markets, and we have thus developed priority market skills training asa reskilling program.
The 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 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 tomeet the needs of global customers
is taught from the dual aspects of
the “core technologies” that are ourstrengths, 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 toapplied fields, in line with their individual experience and knowledge
levels.

Nissha Sustainability Report 2023

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

In order for us to continue to grow while changing our target markets and products, we train engineers who can create products thatcome with “Nisshaʼs unique strengths” beyond the boundaries ofbusiness units.

16-3 Support for Employees' Voluntary
Desires to Learn and Grow

We support self-study for the purpose of encouraging employees
to voluntarily seek opportunities for study, and to enhance theireducation or gain knowledge about the Company's business, byproviding information on programs that encourage study andby providing a system that subsidizes half of the cost for those
employees who complete self-study.

Governance
Quality Management / Efficiency
and Productivity Improvement

Since the fiscal year ended December 2019, we have been
providing career design training annually for full-time employees
in their 50s. All full-time employees aged 50-59 have completed
this training (as of December 31, 2022), which is designed tohelp them understand changes in the external environment,
company systems, and their own values and strengths, andchoose their own careers.

GRI Standards Content
Index / ESG Data

16-5 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
number of hours by the number of employees.
While there are fluctuations due to changes in the number ofprograms offered and participants each fiscal year, both total
training hours and training hours per employee are increasingover the medium- to long-term, together with the enhancementof training programs.
GenderMale

16-4 Career Planning Support

GovernanceTotal training
hours per year

Training hours
per employee

FY2020

FY2021

FY2022

19,092

28,92823,252

Female7,245

13,498

7,361

Total

26,33742,42630,613

Male

11.8

16.4

14.2

Female

17.9

24.0

15.3

Total

13.1

18.2

14.4

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

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
Rights16-6 In-House Training Programs
The Nissha Group values an organizational culture in which
senior employees train junior employees and encourages inhouse training 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 Nisshaʼs strengths and attractiveness, and ourorganizational strength and sense of unity are improving. We
previously had employees take part in external training programsin areas in which we have not accumulated knowledge in-house,
as we accumulate knowledge in these areas we are graduallycreating training programs in-house. This ratio varies from year
to year, but we are aiming to achieve a 50% in-house training
ratio.

Human
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

ESG training at U.S. and European Bases

Governance

GRI Standards Content
Index / ESG Data

Training on RBA Code of Conductat production bases in Asia

The Nissha Group provided ESG training at its U.S. and European
bases in November and December 2022.
Nissha has a history of cooperating with domestic and overseas
affiliated companies to develop a variety of sustainability and
ESG-related initiatives on a group-wide consolidated basis, andhas made efforts to disclose such information.
The Nissha Group does business with many customers who aredeveloping their operations globally, and has also responded tocustomer requests for global standards in the past. However, inlight of the increasing demand for global sustainability and ESG,
especially from European customers, we decided to provide thistraining to systematically deepen awareness of sustainability and
ESG.
This training was positioned as a Nissha Academy program

As one of the key performance indicators and action items
for “ corporate governance ”, a materialit y taken up by the
Sustainability Committee, in 2023 we are providing in-housetraining to familiarize employees with the RBA (Responsible
Business Alliance), a global code of conduct mainly adopted by
the electronics and automobile industries.
The target participants are managers working at Nissha Group
production bases in Asia, namely Nissha Precision Technologies
Malaysia Sdn. Bhd. (Malaysia), Nissha (Kunshan) Precision IMD
Mold Co., Ltd. and Guangzhou Nissha High Precision Plastics Co.,
Ltd. We invited outside experts to be instructors, and learned
the outlines of Social Audits (Social Responsibility Audits) andRBA during the basic training sessions, as well as the details of
requirements during the specialized training sessions.

and was implemented primarily by the Regional Collaborate
Commit tee (RCC), which provide leader ship for companywide initiatives in their respective regions. The training wastaught by an outside expert (ESG consulting firm) and attended
by approximately 400 participants, including management,

Training
nameBasictraining

Social Audit
Overview of RBA basic requirements (occupational,
health and safety, environmental, ethical andmanagement systems)

Specialized
training

Details of RBA requirements (occupational, healthand safety, environmental, ethical and management
systems)managers, and personnel from affiliated companies in Europe
and the U.S.
The training consisted of lectures and workshops. During thelectures, participants learned about global sustainability and ESG

Contents

trends and the Nissha Group's initiatives. During the workshops,
participants were divided into groups according to the company
they belonged to discuss how to incorporate sustainability into
their businesses and develop action plans.

Nissha Sustainability Report 2023

The Nissha Group plans to continue to provide such training in
the future.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17. Employee Engagement
The Nissha Group has established Diversity and Inclusion as oneof 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 theirabilities. At Nissha Group in Japan, we are implementing work
style reforms with the aim of improving productivity, along withenhancing various support systems and promoting the creationof 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.

17-1 Engagement Survey
For employees to work passionately and for the company andemployees to grow together, we believe it is important for thecompany to improve employee engagement by putting in placea system that encourages this and fostering an organizational
culture that is easy to work in. As one of these effor ts, anengagement survey was conducted for the first time, targetinga total of approximately 3,000 employees, including all
permanent employees working for the Nissha group companies
in Japan in the first half of the fiscal year ended December 2022
and employees excluding those working at overseas Nissha
Group factories, etc., in the second half of the fiscal year ended
December 2022. The purpose of this survey was to identify
issues that will improve the diverse capabilities and passions ofNissha, the source of our growth, and to improve it to the way
we are, and will be conducted annually in the future.

Nissha Sustainability Report 2023

■ Engagement survey results（Total for Japan andoverseas）

work styles by reflecting employee feedback• Increased efforts to enhance morning meetings and increase
communication opportunities in the workplace

Response rate 83.0%

17-2 Flexible Work Hours

The positive response rate for willingness to contribute to theorganization and organizational commitment is high. Thismay be related to the fact that our Mission has been widely
disseminated and is strongly identified with. On the other
hand, when limited to their own work, the respondents foundit somewhat more difficult to feel a sense of fulfillment andcontribution to society. Based on these results, we analyze anddevelop the factors at each company, business and workplacelevel and promote specific actions. Based on these results, thefactors are analyzed and developed at company, business andworkplace level, and specific actions are promoted. We willcontinue to implement initiatives and make improvements toenhance a culture in which all employees work with passion.

We have introduced a flextime system to promote work-lifebalance, as well as to flexibly accommodate the time difference
between Japan and overseas, enabling working styles that meetboth the needs of our customers and variations in businessdemands. Many employees, not only in sales divisions, but also
in the development, engineering, and administration divisions,
make use of this system.

17-3 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,the system is now also an indispensable part of our BCP responsein the event of transportation disruptions or disasters.

■ Examples of specific actions• Installed large monitor s in workplaces and fac tories tointroduce the latest corporate information and case studies on
the adoption of our products• Renovated workplace facilities to accommodate diversified

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Sustainability

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Third Party
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17-4 Child-Rearing and Family Care
SupportWe are enhancing the support system for child-rearing and familycare for the flexible working styles of employees at various life stages.

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

Nissha Group in Japan

Statutory coverage

Shorter hours
during pregnancy

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

Days off for
spouseʼs childbirth

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

Shorter hours forchild-rearing

Up to completion of elementary
schoolUp to 3 hours per day

Up to 3 years old
By effort: Start of elementary
schoolDays off for childnursing

1 child: 5 days
2 or more children: 10 days
Up to start of elementary school:
paid
From the first to sixth grade: unpaid

1 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 (for eachoccasion below)
Period:• Birth• Start of elementary school• Start of junior high school• Start of senior high school• Start of technical college―

SocialHuman
RightsGovernanceFair Operating Practices/ Local Communities

Human
Resources

Quality Management / Efficiency
and Productivity Improvement

In addition to the above, in order to support female employees
who wish to return to work early after childcare leave, we haveintroduced a system to provide financial support to employees
who return to work by the end of the month in which their childturns six months old and who meet certain requirements, and asystem to cover part of the expenses of private day care.

■ 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 andhis or her manager of the various systems immediately after
birth registration is filed. Thanks to improved recognition of thesystems available, the number of male employees using childrearing systems is increasing year after year.
SupportsystemChild-rearing
leave

Shorterhours forchild-rearing

Days off forchild nursing

Gender

FY2018FY2019FY2020

FY2021

FY2022

Male

14

18

19

21

25

Female

45

43

50

46

48

Total

59

61

69

67

73

Male

8

7

2

2

3

Female

81

90

93

87

92

Total

89

97

95

89

95

Male

67

79

56

49

50

Female

78

78

64

59

65

Total

145

157

120

108

115

Reinstatement Rate*1(%)
Retention
rate*2(one year)(%)

Governance

Gender

FY2018FY2019GRI Standards Content
Index / ESG Data

FY2020

FY2021

FY2022

Male

100.0

100.0

100.0

100.0

100.0

Female

100.0

95.0

100.0

95.6

95.8

Average

100.0

96.8

100.0

97.1

97.6

Male

83.3

100.0

92.0

83.3

87.5

Female

100.0

90.0

88.6

91.3

100.0

Average

96.3

93.5

90.0

88.5

94.7

*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 from startof useDays off forfamily care

1 family member: 5 days
2 or more family members:
10 daysPaid

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

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

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

Nissha Sustainability Report 2023

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Nissha Group
Sustainability

Third Party
Verification

Environment■ Number of employees who used family care leave

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ Kurumin Certification(Nissha Group in Japan)
SupportsystemFamily careleave
Shorterhours forfamily careDays off forfamily care

Gender

FY2018FY2019FY2020

FY2021

FY2022

Male

1

3

1

0

0

Female

0

1

0

0

0

Male

0

0

0

0

0

Female

1

1

0

0

0

Male

8

12

8

5

6

Female

8

5

7

1

6

■ Communication with employees
A dedicated "Thinking about Careers" website is available on
intranet to introduce various systems and personal experiences
to help employees think independently about the career options
available when life events such as marriage, childbirth, childcare,nursing care, treatment for illness, and retirement occur.
In addition, we established a system that is easy for employees
to under stand by consolidating contact to the Per sonnel
Consultation Desk and referring employees to the appropriate
person in charge according to the content when they havequestions or concerns about life and career plans in general, notjust in relation to childcare or nursing care.

Nissha has received “Kurumin” certification for three consecutive
terms since the fiscal year ended March 2010, for a total of
11 years, 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
to cer tif y companies that have already obtained Kurumincer tification in recognition of their mea sures to suppor t
employees with children and are carrying out initiatives at aneven higher level. This certification was in recognition of ourintroduction of systems to support a balance between work andchildrearing for both men and women, our initiatives to reduce
overtime work, our ongoing seminars on topics related to thepromotion of women in the workplace, and so on.
Within the Nissha Group, Nissha Business Ser vice Co., Ltd.
received Kurumin cer tification 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.

Nissha Sustainability Report 2023

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Nissha Group
Sustainability

Third Party
Verification

Environment17-5 Promotion of the Use of Annual
Paid Leave

W ith the goal of hav ing all emp loyee s t ake f i ve day s ofannual paid leave per year, we are continuing efforts such as
disseminating information internally via the intranet, registering
annual paid leave plans for the year in advance in the attendance
management system, and distributing the results of leave taken
to department managers. In the fiscal year ended December
2022, the acquisition rate was the highest in the past five years.
Currently, the target has been raised to eight days per year, andwe will continue to promote the use of annual paid leave.
In October 2019, we introduced annual paid leave by the hour asa system for facilitating more flexible use of annual paid leave.
This system is widely used by employees.

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

FY2018FY2019FY2020

FY2021

FY2022Average
days

11.0

12.2

11.4

11.5

12.9

Percentage of
use

60.4

65.9

61.4

60.3

66.1

Nissha Sustainability Report 2023

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

17-6 Saved Expired Leave System
T he Nis sha Group in Japan ha s intro duced a paid leaveaccumulation system that allows employees to save up to 30
days of expired annual paid leave to be used in unforeseen
circumstances or to facilitate the performance of social roles.
This system is used in the event of illness either of the employee
or a family member, childcare and family care, school events andholidays, and volunteer activities including registering as a donor
with the bone marrow bank.

17-7 Volunteer Leave System (Nissha
Group in Japan)
T he paid leave accumulation sy s tem can b e us ed w hen
participating in volunteer activities such as registering as adonor with the bone marrow bank, assisting at welfare facilities
managed by local government s, and activities related toreconstruction assistance following natural disasters. In thefiscal year ended December 2022, two people used the system
for a total of three days.

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17-8 Outpatient Sick Leave System(Nissha Group in Japan)

In 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. Nine employees used the systemin fiscal year ended December 2022.
Fiscal Year

FY2018FY2019FY2020

FY2021

FY2022

Male

1

1

2

3

5

Female

1

2

2

3

4

Total

2

3

4

6

9

17-9 Support for Reinstatement After
Long-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.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsGovernanceFair Operating Practices/ Local Communities

Human
Resources

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17-10 Management of Working Time

17-11 Internal Job Posting System

17-12 Awarding System (Nissha Group)

Nissha Group in Japan promote the reduction of overtime work
to realize employee health and work-life balance. In addition to
improving productivity, the Group companies have been steadilydecreasing overtime hours over the years through ongoing
activities including employee training aimed at optimizing
working hours and sending out individual aler t e-mails to
employees who are likely to work long hours. As a result, anaverage of 15 hours of overtime per month were worked during
the fiscal year ended December 2022. At the same time, Group
companies are working to equalize working hour s among
departments by reviewing the division of duties.

The Nissha Group introduced an internal job posting systemwith the aim of providing employees with the opportunity tochoose their own 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 human resources needed for divisions and operations that
we focus on, such as priority markets and businesses withhigh commercialization potential, from the perspective ofmanagement strategies such as medium-term business plans.
Employees who meet the requirements apply on their own
initiative and those that pass the selection are transferred to
the relevant division. Employees transferred through internal
recruitment are playing active roles in their divisions.

Nis sha Group e s t ablished var ious awarding s y s tems for
employees. These systems aim to praise the recipients of theawards and motivate the company and organizations as a whole
by clarifying the requirements that the company should praiseand by widely disseminating facts that correspond to suchrequirements through the company and organizations.

Diverse work styles that took hold during the
COVID-19 pandemic
At the Nissha Group, teleworking has become established asa work style option, triggered by the spread of COVID-19 in2020 and thereafter. In the fiscal year ended December 2022,
although there was a trend toward returning to the office andface-to-face work as the infection situation calmed down,
the teleworking rate remained at an average of about 20%.

The results of the four main group-wide awards in the fiscal
year ended December 2022, namely the CEO's Award, the BU
Headʼs Award, the Synergy Award, and the New Hope Award, areas follows. These award winners include employees at overseas
bases. As part of the companyʼs 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.

■ Implementation status of internal Job posting

system (Nissha Group in Japan)
Fiscal Year

FY2018FY2019FY2020

FY2021

FY2022

Number of job
posting159Nooffering

15

31

Male

2

4

-

6

2

Female

1

1

-

1

0

Successful
applicants(transferees)

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 have contributed
to the bold and dynamic execution ofbusiness strategies

n/a

BU Headʼs
Award

For employees who have made significant
contributions to business performance or
strategy

21

Synergy Award

For employees who have created synergies across regions and businesses

79

New HopeAward

For domestic employees who act proactively without fear of failure or change asworkplace heroes

8

Employees are able to choose the best work style to produce
results that suit their lifestyle, such as combining telework andflextime to enable employees who have been working shorter
hours to work full time, or combining telework and paid leave
taken in half-day or hourly increments to efficiently complete
work and personal tasks in one day.

Nissha Sustainability Report 2023

Number of
winners

Type

17-5

Environment
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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

In addition to the group-wide awards
mentione d ab ove, the Group als oop erate s an award sy s tem for Group
companies, including the Group Company
Representative Award, which recognizes
employees who have performedout standingly well. The Group ha sestablished the global tagline 'PerformanceChampion', which is meant to recognize
employees who have achieved results, andall of these awards are operated under aunified concept and visual.

17-13 Career Resumption ProgramThis 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.
This 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. Two former employees who asked to use this program in
2022 rejoined the Nissha Group in 2023.

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

17-14 Employee Stock Ownership Plan /J-ESOPAs part of our efforts to provide employees with incentives
to increase 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.
In addition, we introduced a Stock Benefit Trust (Employee
Shareholding Purchase-type) in November 2019 as a systemthat allows all employees and contract employees who join theemployee stock ownership plan to receive the benefits of the risein the stock price of the Company's shares for three years. This
program ended in January 2023 and was reintroduced in March
2023.

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

17-15 Retirement Pay System
As part of our retirement pay system, we have introduced adefined contribution pension plan in addition to a defined
benefit pension plan to support our employees' life planningand money planning. Under the defined contribution pension
plan, in addition to the Company's contributions, employees canvoluntarily add their own contributions, which are then investedby the employees themselves.

As of the end of December 2022, 27.5% of the employees havejoined, and together hold 0.9% of the Company's shares.

■ Subscription Status of Employee Stock Ownership

Plan
Year

2018

2019

2020

2021

2022

Number of
eligible
subscribers

2,413

2,353

2,089

2,081

2,011

Number ofsubscribers

598

625

543

573

553

Subscription
rate

24.8

26.6

26.0

27.5

27.5

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

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and Productivity Improvement

Governance

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18. Safety and Health18-1 Policy and Principles

18-2 Safety and Health Management System

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.

Under the Risk Management and Compliance Committee, the Nissha Group in Japan operates its
own environmental, health and safety management system based on the ISO14001 environmental
management system and the ISO45001 occupational health and safety management system, that
includes compliance with relevant laws and regulations as well as items requested by customers, andstrives for the continuous improvement of safety and health activities. The Safety and Health Committees
established at each base are formed from representatives from the bases, such as the safety manager andthe health manager, 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.

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.

Occupational Safety and Health Principles
1.

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

2.

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

3.

We shall introduce appropriate management resources to ensure the safety and promote the health ofNissha 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 thebusiness environment.

6.

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

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 atmanagement review report meetings that all bases participate in. At the end of the fiscal year, a review isheld 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

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

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18-3 Initiatives for FY2022
The Nissha Group in Japan has set safety and health targets
in line with our Occupational Safety and Health Policy andOccupational Safety and Health Principles, and are developinga range of occupational accident prevention activities with thegoal 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 aworkplace 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 thatwork, and risk reduction measures are taken. Chemical substancerisk assessments are conducted at workplaces that use chemical
substances, such a s technical development depar tment s
and production facilities. In addition to regularly 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 and industrial
physician conducts safety patrols of workplaces. In addition
to checking for potential hazards and unsafe work practices
in the workplace, and whether chemical substances are being

Nissha Sustainability Report 2023

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RightsGovernanceFair Operating Practices/ Local Communities

Human
Resources

Quality Management / Efficiency
and Productivity Improvement

managed appropriately, the patrols also try to raise workplacesafety awareness by incorporating the perspective of customer
requirements.
We h o n o r w o r k p l a ce s t ha t ha v e w o r ke d d i l ig e nt l y a n denthusiastically on these safety and health activities and have notexperienced any accidents during the year. We also present anannual safety and health award, the Annual Zero Accident Award,
in an effort to foster a culture of safety.

18-4 Occurrence of Occupational Accidents
The following table shows the occurrence of occupational
accidents at the Nissha Group in Japan. The number of workrelated accidents in the fiscal year ended December 2022
was seven, a record low, and both the frequency and severity
improved greatly due to the decrease in accidents resulting indays of leave. When an accidents occurs, we analyze the cause
and disclose details of the countermeasures on the Nissha
intranet to prevent similar accidents.

GRI Standards Content
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Governance*1. Refers to the number of injuries and casualties resulting from occupational accidents(one or 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.

Number of Occupational Accidents by Region (Nissha
Group major overseas production bases)
The numbers of occupational accidents at the Nissha Groupmajor overseas production bases in the fiscal year ended
December 2022 are given in the table below.
RegionNumber

North
America

19

Central andSouth America

2Europe

30

Asia

2

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

Occurrence of Occupational Accidents (Nissha Group in
Japan)Item

FY2020

FY2021

Average overthe 3 years

FY2022

15

15

7

12.3

3

7

0

3.3

Occupational accident
frequency*1 (%)

0.98

1.48

0.35

0.97

Occupational accident
severity*2 (%)

0.01

0.05

0.00

0.02

0

0

0

0

Number ofoccupational accidents
4 or more days of leave

Fatal accidents* Figures include accidents involving temporary employees.

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18-5 Safety and Health Education andTraining

In accordance with our Safety and
Health Education and Management
Regulations, we are focusing on
education and training to raise safety
awareness and foster a culture ofsafety, using remote education ande-Learning. We also share informationand develop educational programs at
our major overseas production bases.

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18-6 Safety Slogan
We created a safety slogan to raise awareness of safety with theaim of eradicating occupational accidents. This slogan is displayed
at all of our production bases in Japan and overseas.

Risk assessment training

Training Participation
Number ofattendees
in FY2022

Category

Lesson/Session

General training

New employee training (safety and health)20

Safety training at the time of assignment

26

Training when installing new equipment

66

Health training (occupational health andhealth hazards)

102

Health training (prevention of heatstroke)

73

Risk assessment training (safety and health)414

Safety training

Foreman education3

Chemicals training (risk assessment ofchemicals)

85

Safety training (chemical substances)

185

General lifesaving training

49

AED training
Traffic safety education

Nissha Sustainability Report 2023

18-7 External Evaluation
The Nissha Group in Japan received the following awards in thefiscal year ended December 2022.
Award target

Award nameAwarding body

Safe Driving Manager,
Nissha Co., Ltd.
Kameoka Factory

Excellent Safe Driving
Manager

Kyoto Prefecture Traffic
Safety Association

Safe Driving Manager,
Nitec Precision andTechnologies Inc.
Kaga Factory

Excellent Safe Driving
Manager

Ishikawa Prefecture
Association of Safe
Driving Managers

61
1,307

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19. Health and Productivity Management
19-1 Policy

19-2 Structure

Nissha Group sees its mission as to realize the enrichment of peopleʼs 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 have formulated a Health and Productivity
Management Policy based on the belief that it is important for the realization of our mission thateach and every employee to be healthy in mind and body and to be highly motivated in their work,as this will lead to improvements in company performance.

We have appointed a director of the Board, Senior Executive Vice President in charge of health andproductivity management as part of our health and productivity management promotion structure.
Under the leadership of the director, the Health and Productivity Management Subcommittee,
which is under 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 their abilities to be an important management issue, and promote a range of measures tothat end.
Junya Suzuki
Chairman of the Board, President and CEO
Nissha Co., Ltd.
Established on September 3, 2018
Revised on July 1, 2021

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19-3 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 through various initiatives to allow
each and every employee to fully exercise their abilities.

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

and19-4 Various Measures for Health“

Productivity Management Nissha
Wellness"

We have named our health and productivity managementrelated initiative "Nissha Wellness" and we share this concept
with employees at all our group companies, both in Japan andoverseas, through our corporate magazines and the Nissha
intranet. Nissha Wellness incorporates the belief that “animproved lifestyle quality in terms of health will lead to greater
creativity and efficiency at work and a richer life.” The Healthand Productivity Management Subcommittee, which includes
occupational health staff, plays a central role in promoting
health management through various measures.

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■ Wellness Day and Initiatives
We have set up a monthly Wellness Day throughout the Nissha
Group. Wellness Days encourage employees to change theirawareness and behavior by promoting quitting smoking, offering
nutritionally balanced cafeteria menus, promoting exercise such as
walking, and providing information on diet and sleep, etc.
In July 2022, a walking event, participated in by 228 people, washeld to mark the first anniversary of Wellness Day. We support thehealth of our employees in terms of both diet and exercise, which
are essential for good health. For example, our cafeteria has started
to offer healthy menus from Table For Two(*) once a week.

Slogan poster

Symbol mark* Table For Two (TFT) is a global social contribution activities run by the NPO “TABLE FOR TWOInternational” in Japan. Per a TFT meal, ¥20 is automatically donated to developing countries,
which is equivalent to one meal in school lunch. The menu for TFT is a healthy set meal with
reduced calories to prevent obesity and lifestyle-related diseases, and this suits our concept ofNissha Wellness.

• Physical health• Mental health• Teamwork• Work life balance

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Verification■ Walking Challenge
In September 2022, we launched "Walking Challenge," in which
employees walk around the 600m walking trail on our Global
Headquarter premises during their lunch breaks and we publish
monthly ranking of laps on the Nissha intranet.
Under the slogan "Have fun, be healthy," an average of 70 people
participate each month to make up for their lack of exercise.
Some employees have incorporated Walking Challenge into their
exercise routine, which has led to significant weight loss amongsome members.

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SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities■ Initiatives to raise awareness of measures tocombat passive smoking and quit smoking
We int r o du ce d we ek ly no nsmoking days from July 2022,
and we will permanently close
all smoking areas at our Global
Headquarter premises from thefiscal year ending December
2024. In the fiscal year ended
D e cemb er 2022, a s p ar t ofour ef for t to get employee s
to stop smoking we ran atobacco education program on“nicotine dependence and how
to overcome it" and "ways tostop smoking ”. A total of 270
employees from the Nissha Groupin Japan took part in the program. We also provided a distancelearning stop-smoking program as part of our “Wellness Challenge.”
We also subsidize stop-smoking aids and in the fiscal year ended
December 2022, three out of four participants successfully quit
smoking. We will continue these efforts in the fiscal year ending
December 2023. In addition to the World No Tobacco Day in May,
we have also established monthly no-smoking days on which we
close all smoking areas at the same time at all our bases in Japan.
Going forward, we will continue our efforts to raise awareness ofthe health of our employees and their families.

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and Productivity Improvement

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■ Boost the rate of important and detailed medical

checkups
We have been working to achieve a cancer screening rate of
60% or higher, and in the fiscal year ended December 2022,
we achieved a 71% uptake rate. We are working to improve therate of employees who undergo more detailed examinations
following their health check-ups by disseminating information on
cancer awareness, as this links to the early detection and early
treatment of cancer.
In 2022, we cultivated employees with a video showing
impor tance of an early detection of cancer, at the healthcheckup venue. We also enclosed a booklet, "Guide to Cancer
Screening" with the results of the health checkups.

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Sustainability

Environment

SocialThird Party
Verification■ Workplace stress check analysis and mental healthsupportWe provide department managers with the results of stress check
workplace analysis, and teach them the correct way to view andutilize the results to create a comfortable workplace. Members ofthe Health and Productivity Management Subcommittee attend
workplace care interviews and encourage department heads
to be aware of and follow up on their concerns from a moremanagerial perspective.

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Resources

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■ Specific health guidanceSpecific health guidance is a program in which professionals
provide support by reviewing the lifestyle habits of employees
who are at high risk of developing lifestyle diseases and who arelikely to benefit greatly by modifying their lifestyle. We provide
specific health guidance as a high-risk approach. In the fiscal
year ended December 2022, 222 employees throughout thegroup received guidance, and the first-time interview rate was
97%. The final retention rate was maintained at 95%.

■ Support for balancing work and treatment
In 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 17-9 Support for Reinstatement after Long-term Leave■ Nissha Group Health Consultation Service
Mental health support includes regular activities (mental support)
provided by a clinical psychologist and individual counseling. We
also carry out other mental health education (self-care, line care,etc.).

Nissha Sustainability Report 2023

We have set up an external 24-hour health consultation service,so that employees can have easy access to mental healthcounseling by medical professional. 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.

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20. Intellectual Property
20-1 Views on Intellectual Property

20-2 Initiatives■ Training

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 conduct effective
and safety R&D and business activities, the Group emphasizes"building an intellectual property portfolio" and "avoiding intellectual property risks" under the leadership of the Intellectual
Property Management Department.

■ Building an intellectual property portfolio

The Nissha Group is enhancing its various training programs so thateach and every employee works with an understanding of intellectual
property right acquisition and usage and the risk associated withintellectual property.

We use the intellectual property system to properly safeguard
the results of our research and development. Right 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 toobtain rights in other countries as well as Japan. The Intellectual
Property Management Department coherently manages, fromapplication to rights expiration, and intellectual property rights
we have obtained are utilized strategically throughout the entire
Nissha Group.

■ Avoiding intellectual property risks
To prevent inadver tent use of the intellectual proper ty ofother companies or the unauthorized use of our intellectual
property by third parties, we have established a SDI (Selective
D i s s emi nat i o n of Inf o r mat i o n) s y s t em t hat co n s t a nt l ymonitors whether these intellectual properties are being usedappropriately.

We offer a wide range of training for all employees taught byIntellectual Property department staff, from fundamental curriculum
such as explanations on how to read patent publications and theprocess of patent acquisition to on-the-job curriculum such astechniques for surveying patents from other companies and duty
related points to consider regarding intellectual property. In the fiscal
year ended December 2022, a total of 225 employees attended.
In mandatory training for employees in engineering fields, we invitedan outside specialist instructor to teach about ways to find inventions
and techniques for searching for development themes, and so on.
This training was designed to continuously improve employeesʼ skills
and knowledge regarding intellectual property. In the fiscal year
ended December 2022, a total of 240 employees attended.

To prevent problems related to intellectual proper t y, theIntellectual Proper ty Management Depar tment examines
contracts related to intellectual property, such as joint researchand joint development.

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21. Partnership with Our Suppliers
21-1 Basic Policy
The Nissha Group procures the materials, equipment, and services necessary for production and awide range of business activities from suppliers in various regions. We work fairly and equally withall suppliers to promote CSR procurement based on our Purchasing Principles in order to shareawareness of our social responsibility and enhance mutual corporate value.
Our Purchasing Principles cover all business operations throughout the Nissha Group. Basedon these principles and the Purchasing Management Regulations as a management frameworkoutline, we operate a system for each 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 mainly 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.
Established on April 2, 2009 / Revised on May 1, 2022

Nissha Sustainability Report 2023

(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.

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21-2 Maintaining Purchasing Related
Rules

The Nissha Group is currently informing all Group companiesof the Purcha sing Management Regulations, which wereco mp r e h e n s i v e l y r e v i s e d i n 2021, a n d t h e Pu r cha s i ng
Guidelines, which were additionally established in 2022. Thistask is expected to be completed during the fiscal year ending
December 2023. The Purchasing Guidelines require strict
compliance with all purchasing processes, including not only
production materials but also services, the details in contracts
and rules for concluding contracts, and laws and regulations,
including the Subcontract Act.
In addition, we plan to hold briefing ses sions, including
comprehension tests, to ensure that these regulations andguidelines are understood and thoroughly applied, and to
confirm the status of application through internal audits.
In Septemb er 2020, we est ablished 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.

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21-3 Nissha Group Supply Chain

21-4 CSR Audit and SAQ

We at the Nissha Group collaborate with various suppliers
through our busines s ac tivities, and our supply chain is
expanding globally. The global supply chain has been severely
affected recently by COVID-19, the invasion of Ukraine by Russia,
lockdowns in China, the sharp rise in raw material and fuel prices
due to the sharp depreciation of the yen, etc., and shortages
and price hikes due to labor shortages. However, thanks to thecooperation of our suppliers, the Nissha Group has been able tocontinue our sound business activities.

■ Acceptance of customer-based CSR audits

Main Entities of the Nissha Group Supply Chain

Nissha Group production bases are subject to customer-based
CSR auditing. Among these audits, some items require passing
scores as preconditions for mass production orders, someincorporate periodic monitoring, some employ on-site auditing,some use remote auditing, and some have auditing conducted
via a web-based question-and-answer platform.
In the fiscal year ended December 2022, audits were conducted
for Nissha Precision Technologies Malaysia Sdn. Bhd. (NPM), a
production base for the Industrial Materials business, and the
Nitec Precision and Technologies (NPT) Himeji Factory andKaga Factory, which serve the Devices business. Of these, theaudit at NPM found several violations, including the way foreign
national contract employeesʼ personal information is handled.
However, remedial and recurrence prevention measures havebeen taken and corrective action has been completed. Audits atother locations found that no serious claims existed, including
significant human right s violations or environmental law
infractions.

■ CSR audits of suppliers
In addition to undergoing these customer-based audits, we havebeen particularly promoting CSR auditing targeting 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). All corrective action has
been completed with the cooperation of our suppliers.

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In addition to on-site auditing, we also implement annual
surveys using our own Self Assessed Questionnaires (SAQ) togauge the status of supplier CSR activities. Continuing on fromthe last fiscal year, the Devices business conducted a survey of
40 companies (materials suppliers, assembly contractors, etc.) in
Europe and Asia, including China, in addition to Japan. As a resultof 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 asinternal auditors will visit suppliers and conduct on-site auditsin accordance with the procedures. Such sur veys are also
conducted at major production bases outside of the Devices
business, targeting new business partners as well as outsidecontractors and temporary employment agencies.
In the fiscal year ended December 2022, the ESG Task Force*
took the lead in conducting a survey on labor and human rights.
The sur vey targeted suppliers that meet the following two
criteria.
(1) Located in areas of high labor and human rights risk (ILO
Standard: China, Southeast Asia, etc.).
(2) Top 80% of purchase value per base or there is no alternative
procurement source.

As a result of the survey, no points of concern were found at anyof the 95 targeted suppliers.
In the fiscal year ending December 2023 and beyond, we willcontinue this survey and conduct on-site audits of suppliers that
we deem particularly necessary in order to reduce risk in ourtransactions.
The CSR auditing and Self Assessed Questionnaires (SAQ) arebased in our CSR Procurement Guidelines (21-1).
* The ESG task force is set up under the umbrella of the Sustainability Committee onthemes considered particularly important from an ESG perspective, and responsible foraccelerating the respective activities.

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21-5 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.

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In future, we plan to expand the scope of this education to
include mid-level employees and managerial staff as themebased education, as a way to provide systematic procurement
education.

In the fiscal year ended December 2022, 142 employees
at tended training by ex ternal instruc tor s on the revised
operating standards for the Subcontract Act designed forthe procurement and sourcing division and technical anddevelopment departments involved in sourcing. In addition, we
integrated training for employees new to purchasing-related
tasks designed for the procurement and sourcing divisionand basic education training for technical and development
departments, and updated the basic procurement education.
We also established and created a system to regularly provide
theme-based education that goes into themes such as the
Subcontract Act, in greater depth. Basic procurement education
is designed to provide employees newly involved in procurementwith the procurement knowledge they need to do their jobs
and it aims to embed basic procurement knowledge such ascompany procurement rules, including basic knowledge for laws
and contracts related to procurement and Basic Principles forPurchasing.
As a new initiative, we are also providing training to Nissha
Group companies overseas. In the fiscal year ended December
2022, we offered basic procurement education to three Group
companies in China, and 11 employees attended. We plan tocontinue to expand training to other Group companies.

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Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

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22. Along with Local Communities
22-1 Policy

22-2 Initiatives

The Nissha Group contribute to the resolution of social issues through our business activities toward
the realization of our Mission, and engage in social contribution activities in areas designated as
main fields to support in our Social Contribution Policy.

The Nissha Group are expanding our business globally. We promote activities that meet the needs ofour stakeholders through communication with them in each region.
As a company with its headquarters in Kyoto, Nissha Co., Ltd., engaged in the following activities in
the fiscal year ended December 2022.
Environment / support for future generation

Social Contribution Policy・Participated in the activities for environmental workshops at elementary schools organized by the

Nissha and Nissha People contribute widely to society to realize the enrichment of peopleʼs lives professed

Kyoto Chamber of Commercein our Mission by resolving social issues through our businesses and supporting the fields listed below.

Employees visited two elementary schools in Kyoto City tocarry out environmental workshops. In addition to thinking
about global warming and plastic waste issues with students,
we introduced our environmental efforts and our sustainable
material products to make it an opportunity to learn how
companies are tackling social issues.

Main fields of our support:

Environment
Arts and Culture
Medical and wellness
Junya Suzuki
Chairman of the Board
President and CEO
Nissha Co., Ltd.

Workshop at: Kyoto Municipal Utano Elementary School on
September 22, 2022
Kyoto Municipal Taishogun Elementqary Schoolon September 30, 2022

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

Support for future generation
・Participated in Childrenʼs Monodzukuri Project run by the Kyoto City Board of Education

In addition to exhibiting a corporate booth at the Kyoto Monodzukuri Hall of Fame, Kyoto City Inquiry Learning Center for Career Education (Kamigyo-ku, Kyoto), organized by the Kyoto City Board of
Education, we also provided educational materials for 1,100 Kobo Gakushu participants, a handson manufacturing learning program for elementary school students held at the Learning Center.

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Promotion and support of arts and culture
・Donation of relocation and maintenance fund to Kyoto City University of Arts

In collaboration with the Nissha Foundation, we donated a total of 7 million yen to the university's relocation and maintenance fund.
・Sponsorship of arts and crafts exhibitions

Fair Operating Practices/ Local Communities

Governance
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・Support for the areas and people affected by the 2023 Turkey-Syria Earthquake

In February 2023, we donated 3 million yen through Japan Platform*, a non-profit organization,
to support the victims of the 2023 Turkey-Syria Earthquake and to help with reconstruction in theaffected areas.
* Emergency humanitarian assistance framework established in 2000 as an intermediary support organization to support theactivities of NGOs. Japan Platforms works to deliver aid from Japan quickly and effectively to victims of natural disasters in Japanand abroad, refugees and internally displaced persons due to conflicts.

We sponsor exhibitions and art displays in Japan.
Johannes Vermeer and the Dutch Masters of the Golden Age from the collection of the Gemäldegalerie Alte Meister, Staatliche Kunstsammlungen Dresden (TOKYO METROPOLITAN ART
MUSEUM)
Hello! Super Collection - 99 Untold Stories- (Nakanoshima Museum of Art, Osaka)

22-3 Membership in Community Organizations (Nissha)
Nissha participate in various activities in the region.

Inaugural Special Exhibition Amedeo Modigliani (Nakanoshima Museum of Art, Osaka)
Okamoto Taro: A Retrospective (Nakanoshima Museum of Art, Osaka)

Organization / host

Position / membership status

Company
registeredSpecial Exhibition Chanoyu: Tea in the Cultural Life of Kyoto (Kyoto National Museum)Kyoto Chamber of Commerce and Industry

Permanent member

NisshaKYOTO GRAPHIE international photography festival 2022 (The Museum of Kyoto and othervenues in Kyoto City)

Kyoto 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 ofBusiness Administration

Member of External Evaluation
Committee

NisshaRitsumeikan University Business School

Education Curriculum Council Member Nissha

NISSHA FOUNDATION

Representative Director

・Participation as a museum partner

Kyoto National Museum (Higashiyama-ku, Kyoto)
Humanitarian Assistance・Support for Ukraine

In June 2022, in response to the humanitarian crisis in Ukraine, we launched a joint fundraisingprogram with SERMIG*, a European non-profit organization that provides humanitarian assistance. We donated approximately 16 million yen to the organization, which includes donations
contributed by our Group companies around the world and Nisshaʼs contribution.

Nissha* Non-profit organization based in Italy with more than 50 years of experience in providing humanitarian assistance around theworld, that is engaged in support activities in response to the humanitarian crisis in Ukraine.

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23. Quality Management
Realizing our sustainability vision requires us to provide more products and services for the medical
and mobility markets, where the quality of products and services is likely to have a significant impact
on human life and health. To achieve this, it is essential that we develop human resources with themindset, knowledge, and skills to adapt to systems used globally based on the target market.
The Nissha Group has identified the “responsible provision of products and services” as a material
issue and tackling the issue by setting KPIs and action items.

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

Strategy Items

KPIs and Action Items (FY2023)

President and CEO
Nissha Co., Ltd.

• Maintain and expand quality management system inaccordance with our business strategy• Improvement of quality assurance levels by incorporating

Nissha Quality Way
Number of serious quality incidents: 0

quality-oriented designing• Fostering and improving the quality mindset

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

23-1 Policy / Nissha Quality Way

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.

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).
The Chief Quality and Production Officer (CQPO) uses an array of opportunities to spread and percolate our Quality Policy and the Nissha Quality Way, including training at foreign bases, training
targeting new employees and promoted employees, and inclusion in internal company publications(published in Japanese, English, and Chinese).

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
Chief Quality and Production Officer
Nissha Co., Ltd.
Established on April 1, 2011 / Revised on April 1, 2022

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Governance
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and Productivity Improvement23-2 Quality Slogan

23-3 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 ISO9001(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！

Governance

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management, confirmation of compliance in internal audits(promises to customers, standards and regulations, and company
rules), and confirmation of QMS status in management reviews
and instructions for improvement. Through these operations, weare continuously improving the structure and performance of ourquality management systems.

In businesses oriented towards the medical market, we haveacquired a first-class marketing license for medical devices,
an operating permit required to manufacture and sell medical
devices within Japan. Affiliated companies Nissha FIS, Inc. andNitec Precision and Technologies, Inc. as well have both acquired
operating permits to manufacture medical devices. Moreover, 12
Nissha Group bases have obtained ISO13485, the international
standard for quality management systems in the medical devices
industry (as of June 2023).
In businesses targeting the mobility market, eight Nissha Groupfactories and support sites, including Nitec Precision and Technologies, Inc. Himeji Factory (including the Kyoto site), which
manufactures touch sensor modules, have obtained IATF16949
certification for quality management systems in the automotive
industry (as of June 2023).
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23-4 Quality Creation at the Design Stage

23-5 Overall Optimization and Continuous Improvement

The Nissha Group has constantly evolved our quality assurance competency.

The Nissha Group sees linkages between departments and between company functions as process
linkages. As such, we promote the accurate identification of "input" and "output". We are aiming
for overall optimization by being aware of process connections and thoroughly implementing theimportance of division of roles within the company, and by having all employees stand from thecustomer's perspective. We believe that basic concepts like this and the sorting out of functions willbuild the foundation as a manufacturing company.

Usually, 80% of the quality and cost are determined by the design stage, and improvement afteradvancement into the quantity 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 quality creation at the design stage.
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 (at design 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 this is extremely important as a manufacturing
company, and we are deepening this approach across the entire Nissha Group. Moreover, based on
the idea that employees 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 range of 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
(Plan, Do, Check, Act) Cycle to continuously improve, so that we can further improve our customers ʼsatisfaction. As specified in the “VALIDATED DECISION MAKING” in the Nissha Quality Way, we areconstantly 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

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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 Utilize the company intranet to inform all Nissha

Group employees on improvement content including small-group activity, improvement proposals,
Digital Transformation activity, and automatization
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23-6 Quality and Safety of Products
Information on product handling and safety is clearly stated in thedelivery specifications, etc. to customers. In the unlikely event thatan incident involving a defect in our products or services leads toa violation of laws and regulations or a serious accident related toquality assurance, we will respond in accordance with our Regulations for Responding to Serious Quality Incidents and work to resolve the situation as soon as possible. In addition to providing appropriate reports to government agencies in accordance with thelaw, we have a system in place to inform customers of any necessary information as quickly as possible. Employees are made awareof the importance of ensuring product quality and safety throughcorporate ethics and compliance training and other programs. As
stated in "BAD NEWS FIRST" in the Nissha Quality Way, we thinkthat when a problem occurs, prompt escalation and early response
is an opportunity to strengthen trust from all of 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 2022, there were no serious
quality incidents or violations (no fines), as defined in the Regulations for Responding to Serious Quality Incidents. We will continue striving to maintain the number of serious quality incidents
and violations at zero.

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24. Efficiency and Productivity Improvement
The Nissha Group includes the efficiency and productivity improvement as a materiality. We areadvancing 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 thecustomers and resolving societal issues.
Strategy Items
Improve efficiency and productivity
by digitalization of value creation
processes

KPIs and Action Items (FY2023)• Reduction of working hours by automation and efficiency tools
such as RPA (compared to 2020) by 100,000 hours / year
• Conduct training to improve AI/Digital Transformation education
and IT literacy: 20 subjects / year

We are promoting Digital Transformation in a phased approach in the following three steps, and engaging in improving an environment and cultivating a human resource base to support that transformation.
Contents

Examples of initiatives
Increase productivity through the digitization of internal business

STEP1

Cost (input) reduction

processes. Resources secured through this to be reinvested into
high-value-added operations.

STEP2

STEP3

Added value (output)

Extend digitization to the entire organization to increase the added

increasevalue we provide to our customers by leveraging accumulated data.

New added value (output)
creationContribute to the creation of new added value and the resolutionof social issues by utilizing accumulated data and know-how anddigital technology.

Furthermore, we are engaged in human resources development to adapt to the changing businessenvironment, development of IT technologies such as IoT and AI and utilize them in activities ofquality control, production, and sales. Also, we promote automation, labor-saving, and efficiency
improvement of operations in routine tasks.

Nissha Sustainability Report 2023

24-1 Initiatives Through FY2022
In addition to the digitization of production such as the "Smart project ” that aims to make IoT and AI an
integral part of production bases, improve quality and productivity through the use of IT, and automate production processes to save labor, the Nissha Group is also working on improving efficiency, sharing information, and visualizing data by systemizing internal business processes as the digitization of indirect operations.
In the fiscal year ended December 2022, the following results were achieved in the digitization ofindirect operations.
• We built our own in-house automatic yield rate projection and quotation system in specific business
units. As a result, the quality of our designs has improved and we have successfully streamlined business processes internally, thereby speeding up our response to requests for quotations from customers.
• One of our production subsidiaries that handles a wide variety of products in small quantities
built an AI-based production planning optimization system. In the past, production plans werecreated by the person in charge based on past experience and intuition, but by systematizing
experience and intuition, the subsidiary has been able to create a system in which the optimal
production plan is automatically allocated from the system.
In the fiscal year ended December 2022, we continued to provide an in-house training program.
This program provides education that leads to a variety of practical applications, such as teaching Python, a programming language, starting with the basics of coding, statistical analysis, and machinelearning, and includes a simple competition for prediction accuracy as part of its practical training.
In addition to the existing in-house training, we have also introduced an online education platformto provide training on advanced technologies.
Additionally, as a method of productivity improvement in desk work arenas for the various different businessareas, we introduced features including RPA (Robotic Process Automation), an electronic approval system,
and AI-powered chatbot functionality. We also expanded effects by automating and streamlining workthrough enlarging the scope of system application by interweaving multiple systems so as to transcend thediscrete effects gained by using each individual system alone. In the fiscal year ended December 2022, de-24-1

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ployment both in and outside Japan advanced, and from full scale implementation in 2019 to the end of2022, an approximate 116,000 hours of work time per year was streamlined and automatized.

24-2

Initiatives for FY2023 and Beyond

From the fiscal year ending December 2023 onward, we will continue to engage in the systematization of
the entire company, including indirect work, with the aim of improving the quality and quantity of output
from the customer's perspective, and we will promote the creation of a system to improve productivity.

Fair Operating Practices/ Local Communities

In terms of training, we will continue to train data engineers and data scientists, and start to offer
training on business process management, aiming to foster "business translators" who will drive
business transformation by connecting business issues with digital technology. As a means of providing training, we will extend the use of our online education platform to all those who wish to use it,provide quality educational opportunities tailored to each individual, and promote the developmentof human resources through practical education such as the DX Project.

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Nitec Industries, Inc. (NII) Koka Factory is the main factory in Japan responsible for the
production of decorative films for the Industrial Materials business. In 2022, the factory
systemized the management of exposure time to organic solvents with the aim of improving
productivity. This was developed as a factory-specific initiative tied to one of Nissha's
materiality, "efficiency and productivity improvement”.
Organic solvents are used in the production of decorative films. To ensure the safety
and health of workers, working hours are stipulated by law, and the Nissha Group is also
committed to the thorough management of working hours.
Issue

However, the conventional management method used is working hours = exposure time*1,
which means that time away from the workplace is also deemed to be exposure time andthis results in the number of hours that can be worked being shorter than the actual working
hours, and causes workers to take breaks their work during the day, which hinders productivity.

• In terms of data utilization, we will identify problems in our work processes by analyzing work processing
times and other data using accumulated log data, and we will work to streamline and equalize operations.
In addition, with the above in mind, we will continue to expand both in Japan and overseas, 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 and streamlining of workflow
for each function, including marketing, sales business, research and development, and logistics.

Quality Management / Efficiency
and Productivity Improvement

Productivity Improvement Efforts at Nitec Industries, Inc. Koka Factory

We will make full use of data accumulated through digitization, and establish a system for visualization and analysis to improve productivity and product quality.
• In terms of the digitization of indirect work, we will shorten the lead time for calculating performance forecasts through the systematization of planning-related work, which will be achieved by simulating optimalplanned values, and we will promote the creation of a system capable of maximizing sales and profits.

GovernanceIn order to accurately grasp actual exposure time, NII's IT department developed an
exposure time management system that controls each worker's access to the workplace
Countermeasuresand counts exposure time.
This enables us to accurately manage each workerʼs exposure time, which has resulted inincreased productivity at the factory due to reducing breaks while maintaining appropriate
workable hours. In addition, the system can track employeesʼ work hours, thereby helping
to create a safer and more comfortable workplace.

*1. Cumulative exposure time to a certain environment

As a new initiative, we have concluded a comprehensive collaboration agreement for industry-academia cooperation and DX human resource development with Shiga University, and will work tosolve issues related to data science and to create value through digital technology.

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25. Corporate Governance25-1 Basic Approach to Corporate Governance25-2 Overview of 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.

We have established a corporate governance structure as shown in the figure below (as of January 1, 2023).

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, we established a Corporate
Governance Policy.
* For further information, please follow the link below.
About ＞ Corporate GovernanceCorporate Governance Policy（PDF）

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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 Meeting
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-

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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.

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Directors of the Board andthe Board of Directors

Sustainability Committee
Chaired by the president and CEO and vice-chaired by the Director of the Board, Executive Vice President, Director of ESG
Promotion. Based on the Sustainability Vision, the Sustainability Committee is comprised of and works in collaboration with
the ESG Task Force, business organizations, and departments
related to the Groupʼs various themes of creating business opportunities, risk reduction, strengthening management foundations and corporate governance. The ESG task force tackles
themes it considers particularly important from the aspects ofthe environment, society, and corporate governance, and plays
a role in accelerating activities in each of these at Nissha.

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.

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.

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.

Disclosure Control Committee
Chaired by the President. Discusses the necessity of timely disclosure of corporate information and the contents of disclosure.

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.

Internal Audit Office
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.

■ Policy and Procedures for Appointment/

Dismissal of Directors of the Board* For further information, please follow the link below.
About ＞ Corporate GovernanceStandards for Independence of Independent Officers (PDF)

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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.

Internationalism

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

23 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

5 years

50s

Male

―

〇

〇

〇

Wataru Watanabe

5 years

50s

Male

―

〇

〇

〇

〇

〇
〇

〇

Yutaka Nishimoto

2 years

50s

Male

―

〇

Hisashi Iso

2 years

50s

Male

―

〇

Kazuhito Osugi

6 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

4 years

40s

Female

〇

―

〇

〇

〇

Kazumichi Matsuki

4 years

70s

Male

〇

―

〇

〇

〇

Juichi Takeuchi

1 year

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 2023.
*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 2023

25-3

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

As of March 23, 2023, four of the Company's nine Directors of
the Board are Independent Outside Directors and one is a female
foreign national. In addition, all four Independent Outside Directors of the Board have been designated as independent directors,
based on the judgment that they meet the criteria for independence stipulated by the stock exchange and that there are no
conflict of interest risks between them and general shareholders.

■ 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 the

Nissha Sustainability Report 2023

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Board 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
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
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

■ 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
December 2022, we conducted a questionnaire on the evaluation of the effectiveness of the Board of Directors and third-party
interviews in December 2022, and the Board of Directors analyzed and evaluated the results at its meeting in February 2023.
An outline of the results was disclosed in the Corporate Governance Report submitted to the Tokyo Stock Exchange at the endof March 2023.

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.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Reasons for Appointment and Board of Directors Meeting Attendances in FY ended December 2022

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 asa whole as an executive responsible for 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 tocarry 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, Director of Corporate Strategy Planning and Director of ESG Promotion, he shows strong leadership in accelerating the reorganization of the business portfolio of theCompany 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 theCompany 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.
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.

Nissha Sustainability Report 2023

100％
(17/17
meetings)

100％(17/17
meetings)

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 or 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 to givehis 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)

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 given valuable advice and opinions across the whole range of
the Companyʼs management, making the most of his broad experience and extensive
knowledge in the medical devices market, a priority market of the Company, as he has
been engaged in management 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. Mr. Juichi Takeuchi 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 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％(13/13 meetings)*
After heassumed officeas Director of
the Board of theCompany

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Third Party
Verification

Environment

SocialHuman
RightsHuman
Resources

Major Items Discussed in the Board of Directors meeting in FY ended December 2022
Theme
Management strategy

Agenda‒ Interim review of the 7th Medium-term Business Plan and formula -tion of a rolling plan for 2023
‒ Personnel matters concerning Directors of the Board and Audit and Supervisory

Board Members/Corporate Officers
Corporate measures

Governance

GRI Standards Content
Index / ESG Data

■ 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 the Board and the appointment stan-dards for Audit & Supervisory Board Members（2）Proposals for candidates for Directors of the Board and Audit and Supervisory Board Members,

and proposals for dismissal of Directors of the Board（3）Proposals for the appointment/dismissal of the Chairman of the Board, titled directors, and the CEO‒ Consideration of shareholder return measures（4）Matters related to the succession plan for the President‒ Financing (including issuing bonds, borrowing, etc.)（5）Policy on compensation of Directors of the Board‒ Activity reports of Sustainability Committee, ESG Task Force

Investment projects‒ Preliminary deliberations on M&As

and monitoring‒ PMI of major overseas subsidiaries, management briefings by CEO‒ General meeting of shareholders‒ Evaluation of the effectiveness of the Board of Directors‒ IR and SR reporting‒ Presentations by corporate officers (business reports)

25-4 Nomination and Compensation Committee■ Purpose
We establish a Nomination and Compensation Committee as an advisory panel for the Board of Directors in order to ensure the objectiveness and fairness of the appointment/dismissal of Directors of theBoard and the appointment of Audit & Supervisory Board Members, and incorporate the knowledge of
Independent 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 theBoard.

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement‒ Compensation of Directors of the Board‒ Verification of the reasonableness of cross-shareholdings

OthersFair Operating Practices/ Local Communities

Governance（6）Compensation of Directors of the Board■ Membership (as of March 23, 2023)（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 meetings held and attendance in FY

ended December 2022
During the fiscal year ended December 2022, there were five meetings of the Committee, and the attendance status of each member is described below.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Name

Environment

AttendanceSocialThird Party
Verification

Name

Human
RightsHuman
Resources

Attendance

Kazuhito Osugi

100%

5/5meetings

Juichi Takeuchi

100%

5/5meetings

Asli M. Colpan

80%

4/5meetings

Junya Suzuki

100%

5/5meetings

Kazumichi Matsuki

100%

5/5meetings

Wataru Watanabe

100%

5/5meetings■ Major Items Discussed by the Nomination and Compensation Committee in FY

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

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 theymeet the standards of independence established by the stock exchange and are judged not to have aconflict of interest with general shareholders.

■ Role of Audit and Supervisory Board Members and the Audit and Supervisory Board

pany's Directors of the Board using the results of an external questionnaire, amount of compensation)

Our Audit and Supervisory Board Members and Audit and Supervisory Board audit the execution of duties
by Directors, Members of the Board and Corporate Officers as stipulated by laws and regulations, ourArticles of Incorporation, and internal regulations, and make appropriate decisions from an independent,
objective standpoint on electing 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.

Audit and Supervisory Board Members and the Audit and Supervisory Board

Our Audit and Supervisory Board determines the duties of Audit and Supervisory Board Members, theaudit structure, and the audit standards 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.

ended December 2022
‒ The desirable relationship between in-house Directors and Independent Outside Directors‒ Composition and candidates for Directors of the Board and Audit and Supervisory Board Members‒ Compensation of Directors of the Board (confirmation of the level of compensation, etc. of the Com-

25-5

■ 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 the wealth of experience required in
auditing. Independent Audit and Supervisory Board Members are elected from attorneys and certified public accountants with a focus on specialized knowledge in legal affairs, financial matters, andaccounting, who satisfy the requirements of not only the Companies Act but also the standards forindependence 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 and Supervisory Board Members to be deliberated at the general meeting of shareholders.

Nissha Sustainability Report 2023

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 jointly conducting visiting audits.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Reasons for Appointment and Board of Directors/Audit and Supervisory Board Meeting
Attendances in FY ended December 2022

Name

Reason for appointment

Attendance atmeetings of theBoard of Directors

Attendance atmeetings of the
Audit andSupervisory Board

TetsuyaTaniguchi

Mr. Tetsuya Taniguchi engaged in operations of corporate communications, investor relations and corporate social responsibility,
after having been in charge of operations in the general affairs,
and strived for transparency and clarity in disclose for shareholders
and investors. Also, he has extensive knowledge of the Nissha
Groupʼs business as a whole. In light of such broad experience anddeep insight, we appointed him as an Audit and Supervisory Board
Member since we believe that he is an appropriate talented person
who will audit business execution of the Company.

100％(17/17
meetings)

100％(13/13
meetings)

Mr. Kenji Imai is well-versed in the Groupʼs businesses and has
broad experience and deep insight cultivated through his longcareer of engaging in sales and business strategies in the Industrial
Materials and Devices businesses of the Company by leading theformulation and implementation of performance and investment
plans. In light of such experience and insight, we appointed him
as an Audit and Supervisory Board Member since we judge that hecan appropriately execute his duties as an Audit and Supervisory
Board Member.

100％(13/13
meetings)*
After heassumed officeas Audit and Supervisory Boardof the Company

100％(10/10meetings)*
After heassumed officeas Audit and Supervisory Boardof the Company

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 of overseas corporations as a pioneeringinternational attorney in Japan as well as deep insight in the medical devices market, one of the focus markets of the Company. He
has been auditing the Company from his professional perspective.
He has also participated in corporate management as an Independent Audit and Supervisory Board Member of the Company
and of other companies. We appointed him as an Audit and Supervisory Board Member since we believe that he will continue toreflect his experience and deep insight in the audit of the Company from an independent point of view.

100％(17/17
meetings)

100％(13/13
meetings)

Kenji Imai

ShigeakiMomo-oNissha Sustainability Report 2023

YusukeNakanoGovernance
Quality Management / Efficiency
and Productivity Improvement

Governance

Mr. Yusuke Nakano has deep knowledge of finance, accounting
and management administration as a certified public accountant
and profound wisdom in governing corporate management, andhas been auditing the Company from his professional perspective.
He also participates in corporate management as an independent
outside director of the board of another company, an Independent Audit and Supervisory Board Member of the Company andan independent audit and supervisory board member of othercompanies. We appointed him as an Audit and Supervisory Board
Member since we believe that he will continue to reflect his experience and deep insight in the audit of the Company from an
independent point of view.

GRI Standards Content
Index / ESG Data100％
(17/17
meetings)

100％(13/13
meetings)

25-6 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
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.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
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 2023

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 2022 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 2022 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.

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Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

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

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

25-7 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 June 1, 2023)■ Results of FY ended December 2022

At present, we have 15 Corporate Officers, of which two are foreign nationals.
Compensation by category (Million yen)

Title

Total
compensation(Million yen)

Fixedcompensation

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.

Performance-relatedcompensation

Number ofmembers

Base salary

Bonuses

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

318

171

89

57

5

32

32

―

―

3

54

54

―

―

7

Directors of the Board(Excluding Independent Outside
Directors of the Board)
Audit and Supervisory Board
Members(Excluding Independent Audit
and Supervisory Board Members)
Independent Outside Directors
and Independent Audit andSupervisory Board Members*1. The above figures include compensation for one Director of the Board and one Audit and Supervisory Board Member, who retired at theclose of the Ordinary General Meeting of Shareholders for the 103rd Business Term, held on March 23, 2022.
*2. The performance-linked stock compensation, etc. is stated at the amount of provision for management board benefit trust recorded forthe current fiscal year. The Company Shares will be actually granted on a fixed date after the end of the period covered by the 7th Mediumterm Business Plan (from January 1, 2021 through December 31, 2023).

Nissha Sustainability Report 2023

25-10

Environment
Contents /Editorial Policy

26.

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Initiatives of Internal Audit Office26-1 Systems

26-2 Audit Content

In order to maintain independence and objectivity, the Internal Audit
Office is independent of operating departments and is under the directcontrol of the Chairman of the Board.

Audits by Internal Audit Office are broadly classified into "internal control audits" and "theme audits" based on the Financial Instruments
and Exchange Act. Internal control audits are conducted jointly withaccounting auditors by selecting the scope of evaluation from theperspectives of company-wide controls, financial reporting, businessprocesses, and IT controls. This auditing is aimed at guaranteeing thereliability of financial reporting as a result of assessing the effectivenessand efficiency of the Nissha Group ʼ s business activities. The Internal
Audit Office also audits to ensure that the business activities of the
Nisha Group are in compliance with laws and regulations and that theassessments concerning important risks selected by the Risk Management and Compliance Committee are being properly and effectively
conducted in accordance with risk management and complianceregulations, including business ethics matters such as the prohibitionof corruption. Theme audits, on the other hand, use a risk-based approach to select themes at the beginning of each fiscal year to audit
risks that cannot be covered by internal control audits.

Our Internal Audit Regulations outline fundamental matters concerninginternal audits. They set forth a system for drafting or revising our medium-term business plans, as well as our medium-term audit plans andfiscal year audit plans that adjust to changes in law and the social andeconomic environment, and then acquiring the approval of the Chairman of the Board, President and CEO. The audits are implemented for
all Nissha Group business operations in a method that covers all major
sites over the three years medium-term business plan, and conductedin accordance with the annual plan.
After the audit, advice and recommendations are given to the departments subject to the audit, and after a certain period of time, follow-up
audits are conducted to check the status of improvements in the areas
identified. Audit results are reported and advice given at monthly meetings with the Chairman of the Board, President and CEO.
Additionally, the Internal Audit Office hold one meeting per quarterwith the Full-time Audit and Supervisory Board members in which theyreport on their activity status, exchange opinions, and ensure mutual
collaboration with the Audit and Supervisory Board. Moreover, once perquarter, the three entities of the in-house Directors, Full-time Audit
and Supervisory Board members, and Internal Audit hold a meeting(Triangle QBR). Therein, the Internal Audit reports on information andissue awareness it gained during the processes of auditing. This content
is reported, together with the annual audit plan, once per half-year at
the Board of Directors meeting. It contributes to the strengthening ofNisshaʼs audit and supervisory functionality.

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27.

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Internal Control
SystemNissha has established an Internal Control Policy by a decision of
the Board of Directors to provide a system to ensure the appropriateness of work as stipulated by the Companies Act. Nissha isworking to improve our corporate value by constructing and operating an Internal Control System to guarantee that the work ineach 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 systemin the form of internal control reports to the Prime Minister of Japan and disclose the contents to our shareholders and investors.

26-3 Initiatives for FY2022
In the fiscal year ended December 2022, in addition to an internal
control audit, a theme audit was carried out on the status of expense
execution through the purchasing system. An audit was also carried out
related to the overall business management of domestic and overseas
affiliated companies selected through risk analysis. Moving forward, weplan to strengthen monitoring of the maintenance status of the global
control environment.

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28. Risk Management and Compliance
Through our Risk Management and Compliance Committee, and based on our Risk Management
Policy, the Nissha Group conducts centralized management over risks that hinder business operations. Once a year, based on the business models for each company and the business organizations,
we prioritize and appropriately control risks that could hinder the continuity of business activities for
all companies, in cooperation with the departments and subcommittees that have primary responsibility for risk.

28-1 Policy

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 andpreserving 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 acontinuous 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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28-2 Guidelines

28-3 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. 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 composed of all in-house Directors of the Board, with the Senior Vice President (Chief Supply Chain Officer, CSCO) as vice chair.
The Risk Management and Compliance Committee holds a general meeting once a year and progressconfirmation meetings every quarter, and reports to the Board of Directors each year on the statusof activities. The Board of Directors oversees the activities of the Risk Management and Compliance
Committee, discusses reports from the Committee, and gives improvement instructions as necessary.

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.

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

Nissha Sustainability Report 2023

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, for the cross-company
risks, the Committee selects key risks in line with the results of the risk assessment at the annual general meeting. 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 confirms whether the set KPIs are progressing asplanned, and rotates the PDCA cycle (theSustainability Committee manages the
progress of materiality risk items).
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 serious risk incident arises(including a serious report to the hotline),
the Risk Management and Compliance
Committee convenes on an emergency
basis.

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28-4 Risk Assessments
The Risk Management and Compliance Committee carries out
risk assessments on the 16 items to the right under its purview.
The departments or subcommittees that manage the key risks
selected through this risk assessment set Key Performance Indicators and action items, and work to mitigate these risks throughtheir activities.
We aim to conduct risk reduction that is even more in line withbusiness activities. Starting in the fiscal year ended December
2022, in addition to the Headquarters Corporate Division risk
assessment, risk priority levels will be considered in business units
and affiliated companies as well. General Managers will selectkey risks, taking into account the process of confirming appropriateness from a business management perspective.

■ Risk Assessments and Risk Management Methods(1) Target risks• Cross-group risks (including compliance risks)(2) Selection process for key risks
The following process is used by the Risk Management andCompliance Committee to select key risks.

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Fair Operating Practices/ Local Communities(3) Management method

Key risks
Low "effectiveness of control
activities" withrespect to "inherent risks"

The lead department or subcommittee sets
the Key Performance Indicators and ac tion items, and the Risk Management andCompliance Committee checks the prog ress status.
(Business risks are spearheaded by thebusiness organization, which checks via
business reviews, etc.)

High "effectiveness of control
activities" withrespect to "inherent risks"

Subject to monitoring, and the Risk Man agement and Compliance Committee
confirms the status of maintenance andoperation by the lead department or subcommittee.

Cross-grouprisks other than"inherent risks"Managed by the business organizationand lead department, and reported at theMonthly Business Review (MBR)

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

(i) For the above cross-group risks, the high-value risks calculated using the "probability of occurrence" and "impact
when it occurs" horizons are considered the "inherent risks".

1. Fair business practices (violation of antitrust laws, violation of unfair competition laws, threats and coercion
against anti-social forces and companies, bribery andcollusion with business partners, insider trading, circular transactions, etc.)(ii) In addition, the "effectiveness of control activities" is evaluated, and risks with low "effectiveness of control activities"
with respect to "inherent risks" are selected as key risks.

2. Labor and human rights (harassment (e.g. sexual
harassment, power harassment), health and mental
health management, health and safety, etc.)

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3. Enhancement of human capital (ensuring management human resources and global human resources,
mismatch between business portfolio and human resources portfolio, etc.)
4. Ensuring quality and safety of products/services (useof banned substances, quality falsification, recalls andserious complaints, etc.)
5. Ensuring quality and safety of medical products/services (use of banned substances, violation of the Pharmaceuticals and Medical Devices Act)
6. Intellectual property rights (patent infringement, information contamination, etc.)
7. Supply chain management (supplier management (labor and human rights, health and safety, environment,
information security, compliance), child labor andforced labor, etc.)
8. Environmental protection (climate change response,
waste management, chemical substances management, water pollution, etc.)
9. Trade management (trade management (e.g. violationof foreign exchange and customs laws))
10. Information systems (theft and leakage of confidential
and personal information, information leaks via SNS,
malware infection, etc.)
11. Asset management (misappropriation of company
property (money), theft or loss of company assets)
12. Business continuance (natural disasters (earthquakes,
typhoons, floods, etc.), fire and accidents)
13. Business strategies (changes in competitive/market
environments)
14. Business development (development delays, interrup-

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tion in technology)
15. Production activities (design defects, release of defective products)
16. Finance (failure of capital planning, exchange rate
fluctuations)*Items in parenthesis are examples of risks.

As a result of the risk assessment, the Nissha Group in Japan
has chosen as key risks fair business practices, labor and humanrights, product and service quality and safety, medical productand service quality and safety, supply chain management, information systems, and business continuity. The Nissha Groupoverseas has selected labor and human rights, financial affairs,
fair business practices, information systems, business continuity,and supply chain management.

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28-5 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.

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■ Awareness-raising activities
Corporate Legal Affairs also holds training sessions, etc., as a way
to further boost awareness among these promotion managers andgroup leaders. In the fiscal year ended December 2022, we held
training sessions aimed at Nissha Group in Japan promotion managers and group leaders for internal reporting systems coinciding
with the enacting of the amended Whistleblower Protection Act.
And overseas, our EU, China, and North American bases are
identifying and reducing risks according to regional characteristics. In the fiscal year ended December 2022, in order to eliminate bribery and collusion with business partners, we took actions
including reviewing internal regulations and obtaining written
pledges, etc. from suppliers at our EU bases and China bases.

■ Company-wide Simultaneous Training, etc.
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 isprovided not just for full-time, contract, and temporary employ-

Corporate Ethics
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ees, but for managers of subcontractors and even part-timers.

Affairs Section.

In the fiscal year ended December 2022, training themes at domestic bases covered corruption concerns corresponding to the
key risks selected as a result of risk assessment, including appropriate information handling, harassment, and expense mismanagement. In our Western and Asian bases as well, we introduce
examples the Nissha Group deems important and hold training
corresponding to the laws and customs related to each differingbusiness operation content at all domestic and overseas bases.

Concerning compliance with the Pharmaceutical and Medical Device Act, in order to achieve further promotion of the high-priority
Nissha Group medical devices field, we have maintained a Medical
Healthcare Consultation Desk since the fiscal year ended December 2021 in addition to providing the above training efforts, etc.

Questionnaires are sent out after each company-wide simultaneous training session to collect a wide range of information andopinions from all employees about concerns and actions thatneed to be improved in the workplace from the perspective ofcorporate ethics and compliance. Examples and results of improvements based on this information are reported to the Risk
Management and Compliance Committee, along with reports on
training implementation.

■ Officer Training, etc.
At the Nissha Group, in addition to company-wide simultaneoustraining, we also hold compliance training designed for officers.
In April 2023, we invited outside lecturer (lawyer) to provide
training related to information handling (including insider trading
regulations). Additionally, as the establishment of the Act on Securing Quality, Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices legal compliance system (revised
law effective as of August 1, 2021), we are providing continual
response to required matters with efforts including "Education
for Officers and Employees". In April 2023, with the cooperationof the Kyoto Prefectural Government (visiting lecturers and specialist staff), a training course on "Education for Management
Level" was conducted by specialist staff of the Pharmaceutical

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28-6 Hotline
The Nissha Group in Japan has in place an Internal Reporting
Code and a hotline based on the Whistleblower Protection Act forthe purposes of quickly identifying the facts about illegal, unfair,or unethical 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
to all employees, the Labor and Human Rights Handbook, theNissha Group intranet, in-house training, and awareness posters.
All employees working for the Group in Japan and overseas canuse this service, and in the fiscal year ended December 2019, we
expanded the scope of users by establishing a contact point forsome of our domestic suppliers. This contact point is an outside
attorney, an independent and impartial third party.
The Internal Reporting Code contains the following.

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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 the Risk Management andCompliance Committee, where it is discussed as necessary, after
which, measures are taken according to the results of the investigation and discussion.
The number and main content of consultations received during
the fiscal year ended December 2022 are shown below.
• Hotline (for employees): 4 cases (Of these, three cases wererelated to harassment. In all cases, corrective actions werecompleted through cautionary guidance and workplaceenvironment improvement. An overview summary was disseminated via the Nissha intranet, awareness was raised foreveryone instead of just for the perpetrators, and measures
were taken to prevent recurrence.)• Supplier hotline: 0 cases
For overseas locations as well, in addition to already ongoing efforts such as installing and operating report acceptance services
for some group companies in China and the Southeast Asian
region, we also plan to commence the operation of report acceptance services in some North American and European bases
starting in the fiscal year ending December 2023.

• The whistleblower shall not be subjected to any disadvantageous treatment by the Company or other employees dueto their report.
• Anonymous reporting is also possible.

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28-7 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.

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29. Information Security
29-1 Policy and Principles

29-2 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 threats 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 technologicalinformation, 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 entire Nissha Group, including overseas
affiliates. 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 the ISMS, andregular ISO27001 audits by external examiners to provide opportunities for improvement.
* ISMS=Information security management system

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.

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

3.

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.

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.

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

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Domestic

Overseas264
employees

51
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Information Security Managers

83 employees

Information Security Promoters

181 employees

Information Security Managers

17 employees

Information Security Promoters

34 employees

29-3 Deployment of the Management
SystemThe Nissha Group operates the ISMS at all its bases, both inJapan and overseas.
In Japan, we have obt ained ISO27001 cer tification, theinternational standard for ISMS. Overseas, we have been rollingout 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.

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29-4 Efforts for Risk Reduction

29-5 Training

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 and operation.
In the fiscal year ended December 2021, we permeated thisoperation, performed internal auditing of the implementation
status, and promoted expansion abroad. In the fiscal year ended
December 2022, we launched an initiative to appoint internal
auditors from among locally hired employees to strengthen
the effectiveness of internal audits overseas and to improveeducation and awareness. Information assets are important
information that differentiates us from our competitors andincreases 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 thoroughand strict control concerning trade secrets.

Cyber attacks are becoming increasingly sophisticated day byday, so merely strengthening systems will not prevent all of them.
To prevent damage, it is essential for each and every employee tobe fully aware of information security and act with discipline sothat they can learn about threats and methods, and recognize
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 2022 training attendance rate was
98.9%. To further increase conduct and awareness level in theworkplace, we will also focus on education for security managers
at each workplace moving forward.

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 af fected
or information leaks through social media postings. We arealso 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.

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30. Trade Management30-1 Policy and Principles

30-2 Structure

The Nissha Groupʼs ratio of overseas sales is 88.3% in the fiscal year ended December 2022. As theGroupʼs businesses expand globally, disciplined trade management is an essential issue from theperspective of business continuity.

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 theTrade Management Policy, Trade Management Principles, and Trade Management Basic Regulations.

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 necessary rules and regulations, and maintain astructure toward continuous improvement of trade management in order to respond to various
internal and external changes in the environment.

Trade Management Policy

At Nissha Group in Japan, we place Trade Management Subcommittee members (responsible persons,directors, and members) in business divisions, corporate management departments, and affiliatedcompanies 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 tradecontrol 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

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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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30-3 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 postaudits were conducted in October 2019, and we maintain all
approvals. As of December 28, 2022, 59 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. Their post-audits were conducted in
May 2022, and we maintain both approvals.

The AEO program is designed to secure and facilitate global trade
and to strengthen a country ʼ s international competitiveness byproviding benefits such as reduced or simplified customs controls

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• Aim 2: Zero omitted declaration of charge factors. By regularly operating that the internal post-checking system established to prevent occurrence is working correctly in cooperation with related departments, no incidents occurred in thefiscal year ended December 2022, as in the previous fiscal
year.

to operators with cargo security management and compliancestructures. The September 11, 2001, terrorist attacks on the
United States raised awareness of the necessity of an internationalframework for reinforcing anti-terrorism measures by ensuring
both security and efficiency in the international movement ofgoods. In 2006, the World Customs Organization (WCO) adopted
a set of AEO guidelines as a global standard and the basis onwhich countries enact laws and operate their respective AEO
programs. Japan launched its AEO program in 2006, starting with

AEO Approval Form

Governanceexporters and expanding gradually into the current form.

30-5 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 2022, we carried out training for 122 employees actually
involved in trade operations in Japan, regardless of their department.

■ Themes• Security trade controls

30-4 Initiatives for FY2022• Determining relevance and screening transactions• Incoterms and HS codes• Internal import/export steps

In the fiscal year ended December 2022, following on from theprevious fiscal year, we engaged in the following two items aiming to implement proper and lawful operations during importingand exporting.
• Aim 1: Zero incidents of illegal/unlawful declarations. In thefiscal year ended December 2022, there were 12 incidents.
In workplaces where two-thirds of these incidents occurred,
the division manager issued a declaration of elimination andfocused on improvement activities, resulting in a decrease in
the number of subsequent incidents.

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

31. Anti-corruption
31-1 Guidelines

31-2 Efforts to Ensure Awareness and Internal Audits

For the bribery, collusion 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 the fiscal year ended December 2022, we addressed improper useof expenses as one of the case study issues in the company-wide simultaneous training on corporate ethics and compliance, and also reviewed the expense accounting flow in the domestic group.
Moreover, in the fiscal year ended December 2022, at our EU and China bases, we reviewed existing
systems and took actions such as obtaining written pledges from suppliers. Because bribery is an entrenched practice in some countries and regions, we conduct internal audits on a regular basis.

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 con-

The Group has not identified any cases of corruption in the fiscal year ended December 2022.

stitute 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

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

32. Business Continuity
32-1 Policy and Principles

32-2 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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Third Party
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32-3 Initiatives
Nissha Group in Japan haves in place a set of Emergency Response Regulations that defines “ emergency ” and stipulates
the action and structure required between initial response to adisaster and the early stages of business recovery. In the eventof a serious interruption of business due to emergency over acertain level, such as a natural disaster or pandemic, we set up a
response task force headed by the President. In addition to habitually stockpiling supplies at major bases in Japan in preparationfor emergencies, we also distribute “survival cards” listing information about what to do when an earthquake strikes, educate
employees using an e-Learning, and conduct emergency training
to promote thorough awareness about the general rules for action and response in an emergency.We also stockpile supplies
at major bases in Japan, distribute “survival cards” listing information about what to do when an earthquake strikes, educate
employees using an e-learning system, and conduct emergency
training to promote thorough awareness about the general rules
for action and response in an emergency.

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

Operation of a safety confirmation system

Implementation of management BCP training

We have introduced a system under which employees register

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. The BCP drill in the fiscal year ended
December 2022 targeted management level and was based on a fire
breaking out at the Nissha Group's Nitec Industries, Inc. (NII) Koka
factory at night.

their safety information so that we can smoothly and quickly
confirm their safety status in the event of a major natural disastersuch as an earthquake or typhoon, a pandemic or other emergency. As part of our safety confirmation drill during our biannual
disaster drills, we send an e-mail to all employees simultaneously,
and managers confirm the safety of the members of the company based on employeesʼ responses to the e-mail.

To make it more realistic, the drill was held at night, online, without
informing the participants in advance of the date and time. The drillbegan with the establishment of a head office task force headed by
the President and CEO and a base task force at NII Koka. Employees
from business divisions and strategic and administrative divisions
actively commented on their respective areas of responsibility toensure employee safety and minimize business risks. The drill was ameaningful exercise that highlighted issues such as the need to beprepared for emergencies and to secure substitutes.
We consider the construction and operation of BCP/BCM importantfor improving the companyʼs competitiveness and also leading to
improved corporate value, and we plan to continue to conductvarious simulation-based drills each year.

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.

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Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

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 2022, the surveys covered Kameoka 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, some areas requiring
improvement were noted, and we are increasing the disasterprevention level by quickly dealing with these in detail.

Kameoka Factory

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Sustainability

Environment

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Verification

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RightsHuman
Resources

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

33. 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.
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.

Hitoshi Koya
Senior Vice President, Chief Financial Officer
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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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

34. Responsible Mineral Procurement34-1 Policy

34-2 Initiatives

Nisshaʼs policy on conflict minerals is outlined in our Basic Approach to Responsible Mineral Procurement. We clearly state our belief that Nissha Group products do not use materials made from conflictminerals, which are used to finance armed groups involved in human rights abuses such as looting,assault, and forced labor, and we follow the OECD's conflict minerals due diligence guidance.

34-2-1 3TG Usage Status
The 3TG (tin, tantalum, tungsten, and gold) used in Nissha Group's products are shown in the tablebelow.
Segment

Basic Approach to Responsible Mineral Procurement
The Nissha Group is deeply concerned that a portion of the conflict minerals extracted by the Democratic

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.

3TG in use

Industrial Materials

Only a small portion of Decoration (Mobility) and
Decoration (Home appliances and others)

Tin

Devices

For Tablet devices, Smartphones, Portable gameplayers, Industrial equipment (logistics related),
Mobility, Gas sensors and others

Tin, tantalum,
tungsten, and gold

Medical Technologies

Only a small portion of Medical devices (CDMO)

Tin, tungsten, and gold

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.

Applicable product group* The names of the segments and product lineups are in line with "25. Net sales (2) Disaggregation of revenue” in our Annual Securities Report
From January 1, 2022 to December 31, 2022. Net sales of products containing conflict minerals accounted for approximately 40% of total
net sales in the fiscal year ended December 2022.

34-2-2 Survey Requests to Suppliers

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.
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 2023

The Nissha Group, mainly through its related business units, requests suppliers to conduct a surveyof 3TG used mainly in materials for mass-produced products using the latest CMRT (Conflict Minerals Reporting Template), generally once a year. Then, based on the CMRTs submitted by suppliers,
we prepare our CMRTs and submit them to our customers.
We review the content of CMRTs submitted by suppliers, and if a refinery, etc. is no longer in business or has changed its name, we ask suppliers to resurvey.
Concerning the survey for the fiscal year ended December 2022, in addition to handling refineries

34-1

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Nissha Group
Sustainability

Environment

Third Party
Verification

SocialHuman
RightsHuman
Resourcesthat were removed from the Responsible Minerals Assurance Process (RMAP) compliance list due
to the impact of sanctions imposed by the U.S. government and others on Russia and refineries ourcustomers requested not to be used, we encouraged our suppliers to procure their 3TG from Conformant Smelters & Refiners. Regarding gold in particular, we ask our suppliers to shift their procurement sources to refineries listed on the LBMA Good Delivery List or RJC COP or COC certified sources,or to refineries listed on the Conformant to RMAP Gold Standard. We intend to continue these kindsof efforts in the future.

34-2-3 Developing and Implementing Strategies to Address Identified Risks
In some cases, we may ask suppliers to utilize the RMAP audit program if non-certified refineries
are included in the refinery information they have submitted in the CMRT. Additionally, concerning
3TG, if it becomes clear that a relationship exists with a refinery upstream in the supply chain thatis involved in armed forces or human rights abuses, we will consider taking strict measures in linewith our customerʼs requests. However, there were no such cases in the fiscal year ended December
2022.

Fair Operating Practices/ Local Communities

Governance
Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

FY2022Tin

Tantalum

Tungsten

Gold

Total
(cumulative
number)Total number of smelters andrefineries

64

33

36

91

224

Of which, total number ofsmelters and refineries with
conformant certification

55

33

34

87

209

* The table above covers almost all product lineups that use 3TG.

Recently, we are receiving surveys with Extended Mineral Reporting Template (EMRT) from our customers concerning minerals other than the 3TG such as cobalt.
In light of this situation, we are considering incorporating environmental perspectives in addition tohuman rights violations in our current policies, Basic Approach to Responsible Mineral Procurement.

34-2-4 3TG Survey Results
The CMRT provided by the Responsible Minerals Initiative (RMI) is designed so that the scope ofdeclaration during responding can be selected from (1) company level, (2) product level, and (3) user-defined level. However, we ask suppliers to respond at the product level in order to ensure that thesmelters of minerals used in the parts and materials for Nissha Group products can be definitively
identified. We believe that this type of surveying will enable us to identify targets for risk reduction,such as non-certified smelters and refineries, and will lead to effective due diligence.
In our 3TG survey for the fiscal year ended December 2022, we received responses from 100% of
our suppliers for almost all product lineups. As a result of analyzing the responses from suppliers, incases that included smelters that were not accredited by RMI, we took steps to reduce risk by changing suppliers and asking suppliers to utilize the RMAP audit program.

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Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

35. Management System and Other Certification Acquisitions
The Nissha Group's management system and other certification
status are as follows. (as of June 2023)■ Quality■ Quality
Subject Areas

ISO9001

Subject Areas

Quality

ISO13485
Medical devices

Nissha Co., Ltd.

〇 *1

Nissha Co., Ltd.

〇 *4

Nitec Precision and Technologies, Inc.

〇

Nitec Precision and Technologies, Inc.

〇 *5

Nitec Industries, Inc.

〇

Graphic Controls Acquisition Corp.

〇

Nissha Printing Communications, Inc.

〇

Lead-Lok, Inc.

〇

Nissha F8, Inc.

〇 *3

CEA Medical Manufacturing, Inc.

〇

Nissha Business Service, Inc.

〇

Sequel Special Products, LLC〇

Nissha FIS, Inc.

〇

Nissha Medical Technologies (Ohio), Inc.

〇

Nissha Metallizing Solutions N.V.

〇

Nissha Medical Technologies SAS〇

Nissha Metallizing Solutions S.r.l.

〇

Nissha Medical Technologies Ltd.

〇

Nissha Metallizing Solutions GmbH〇CEA Global Dominicana, S.R.L.

〇

Nissha Metallizing Solutions Ltd.

〇

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

〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

Nissha Schuster Kunststofftechnik〇〇*4. For departments related to BS Probe Holder EX and electrode products.

Nissha Back Stickers
Nissha Back Stickers International〇

Nissha SB Poland Sp.zo.o.

〇

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

〇Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

*2

*1. Only obtained at sales, purchasing, design and development, production and logistics
departments of Industrial Materials Business Unit, Devices Business Unit and RB
Business and Product Development in Global Headquarters, Tokyo Division Headquarters
and Kameoka Factory.

*5. For departments related to BS Probe Holder EX products at Kyoto (production base).

■ Quality
Subject Areas
Nissha Co., Ltd.

ISO22716
Cosmetics〇 *6*6. Obtained for the production of microneedle patch for cosmetics in the PCBU Production
department of the New Business Development Office at the Global Headquarters.

*2. Not obtained at the Kaga Factory and Tsu (production base) in the manufacture for specificcustomers.
*3. Obtained at the Kyoto studio.

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Nissha Group
Sustainability

SocialThird Party
Verification

Environment■ Quality

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities■ Environment
Subject Areas

IATF16949〇 *7

Nitec Precision and Technologies, Inc.

〇 *8

Nissha Eimo Technologies〇

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

〇

Nissha Schuster Kunststofftechnik〇

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

〇Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

*7. For the support departments related to the touch sensor module for automotive in
Global Headquarters and Kameoka Factory.
*8. Obtained at the Himeji Factory and Kyoto (production base).

Governance

GRI Standards Content
Index / ESG Data

■ Energy
Subject Areas

Automotive

Nissha Co., Ltd.

Quality Management / Efficiency
and Productivity Improvement

ISO14001

Subject Areas

Environment

Nissha Co., Ltd.
Global Headquarters〇

Nitec Industries, Inc.
Headquarters / Koka Factory〇

Nitec Precision and Technologies, Inc.
Headquarters / Himeji Factory〇

Kaga Factory〇

Tsu (production base)〇Kyoto (production base)〇*9ISO50001
EnergyNissha Metallizing Solutions S.r.l.

〇

Nissha Metallizing Solutions GmbH〇

Nissha Schuster Kunststofftechnik〇

Nissha Back Stickers〇■ Occupational health and safety
ISO45001

Nissha FIS, Inc.

〇

Nissha Business Service, Inc.

〇

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

〇

Nissha Metallizing Solutions S.r.l.

〇

Nissha Metallizing Solutions S.r.l.

〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Nissha Metallizing Solutions GmbH〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Nissha Medical Technologies SAS〇

Nissha Schuster Kunststofftechnik〇

Nissha Back Stickers〇

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

〇Guangzhou Nissha High Precision Plastics Co., Ltd.

〇

Nissha Precision Technologies Malaysia Sdn. Bhd.

〇

Subject Areas

Occupational
health and safety*9. Obtained at administration departments and design and product development departments.

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Nissha Group
Sustainability

SocialThird Party
Verification

Environment■ Information security

Human
RightsHuman
Resources

Nissha Co., Ltd.
Global Headquarters

Quality Management / Efficiency
and Productivity Improvement

GRI Standards Content
Index / ESG Data

Governance■ Others
ISO27001

Subject Areas

Fair Operating Practices/ Local Communities

Governance

Information
security〇

Tokyo Division Headquarters〇

Nagoya Sales Office〇

Kameoka Factory〇

Subject Areas

FSC COC

Nissha Co., Ltd.

〇

Nissha Printing Communications, Inc.
Headquarters〇

Osaka Sales Offie〇

Tokyo Sales Office〇

Kameoka Factory

〇

PEFC

EN15593

EC93/42/EEC*11

Nissha Metallizing Solutions N.V.

〇

Nissha Metallizing Solutions S.r.l.

〇〇

Nissha Metallizing Solutions GmbH

〇

〇

〇

Nissha Metallizing Solutions Ltd.

〇〇

Nissha Metallizing Solutions Produtos Metalizados Ltda〇

Tsu (production base)〇

Graphic Controls Acquisition Corp.

〇

Kyoto (production base)〇Nissha Medical Technologies SAS〇

Nissha FIS, Inc.

〇

Nissha Medical Technologies Ltd.

〇

Nissha Printing Communications, Inc.
Headquarters〇*11. For paper purchasing departments in Nissha Co., Ltd.

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

〇
〇 *10

Osaka Sales Offie〇

Tokyo Sales Office〇

Kameoka Factory〇 *10

Nissha F8, Inc.
Tokyo Studio〇Kyoto Studio〇Nissha Business Service, Inc.

〇〇

*10. Certification is included in the Kameoka Factory of Nissha Co., Ltd.

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Verification

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SocialHuman
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

36. GRI Standards Content Index
Nissha Sustainability Report 2023 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 2023.
GRI Standards

Disclosure Item

Location of Nissha Information Posted

Pages
on PDFGRI Standards

Disclosure Item
Nomination and selection of thehighest governance body25-3 Directors of the Board and the Board of Directors, 25-4
Nomination and Compensation Committee

25-2

2-11

Chair of the highest governancebody

25-3 Directors of the Board and the Board of Directors > Roleof the Board of Directors

25-4

2-12

Role of the highest governance body 3-1 Nissha Philosophy, 3-2 Sustainability Vision (long-termin overseeing the management ofvision for 2030), 3-3 Promotion Framework for Sustainability,
impacts
3-4 Materialities (Key Issues) and KPIs

3-1

1. The organization and its reporting practices

13-5 Relationship with Labor Union

2-1

Organizational details

Website About > Company Outline
Website About > Nissha Group

2-2

Entities included in theorganizationʼs sustainability
reporting

1-4 Scope of Reporting

1-1

1-5 Major Affiliated Companies and Businesses

1-2

1-6 Major Changes in Reporting Scope

1-2

Website > Investors > IR Library > Securities Report (only in Japanese)
2-3

2-4

Reporting period, frequency andcontact point
Restatements of information

1-3 Publication Dates

1-1

1-7 Publishing Division and Contact for Inquiries

1-2

15-1 Nissha Group Employee Composition > Composition ofmanagerial staff (Nissha Group in Japan)

15-2

15-4 Promotion of Women's Advancement

15-3

2-5

External assurance

8. Third Party Verification8

2-6

Activities, value chain and otherbusiness relationships

1. Editorial Policy

1-1

21. Partnership with Our Suppliers

21-1

2. Activities and workers

Website About > Company Outline
Website About > Nissha's Business
Website Business > By Industry

27. Internal Control System

26, 27

3-3 Promotion Framework for Sustainability

3-2Delegation of responsibility for
managing impacts

2-14Role of the highest governance body 3-3 Promotion Framework for Sustainability
in sustainability reporting

3-2

2-15

Conflicts of interest

25-4

2-16

Communication of critical concerns 3-3 Promotion Framework for Sustainability

25-2 Overview of Corporate Governance25-3 Directors of the Board and the Board of Directors > Roleof the Board of Directors

25-1

Website > Investors > IR Library > Securities Report (only in Japanese)
3-2

27. Internal Control System

26, 2728-5 Promotion of Corporate Ethics and Compliance

28-4

2-17

Collective knowledge of the highest
governance body25-3 Directors of the Board and the Board of Directors > Skills 25-3
and Diversity Required of Directors of the Board

2-18

Evaluation of the performance ofthe highest governance body25-3 Directors of the Board and the Board of Directors > Policy 25-2
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 2022

2-19

Remuneration policies

25-6 Compensation of Directors of the Board and Audit andSupervisory Board Members

2-20

Process to determine remuneration

2-7

Employees

15-1 Nissha Group Employee Composition

Workers who are not employees-

2-9

Governance structure andcomposition

3-3 Promotion Framework for Sustainability

3-2

Website > Investors > IR Library > Nissha Report 2023 p66

25-2 Overview of Corporate Governance25-1

Website > Investors > IR Library > Securities Report (only in Japanese)

Nissha Sustainability Report 2023

13-3

2-13

2-8

15-1

3. Governance

Pages
on PDF

2-10

General Disclosures

GRI 2: General
Disclosures 2021

Location of Nissha Information Posted

25-8

Website > Investors > IR Library > Securities Report (only in Japanese)
25-6 Compensation of Directors of the Board and Audit andSupervisory Board Members

25-8

36-1

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Disclosure Item
2-21

Third Party
Verification

Environment

SocialHuman
RightsLocation of Nissha Information Posted

Human
Resources

Pages
on PDF

Annual total compensation ratio

-

2-22

Statement on sustainable
development strategy

2. CEO Message

2

2-23

Policy commitments

3-1 Nissha Philosophy

3-1

4. Environmental Policy and Management Structures

Embedding policy commitments

GRI Standards Content
Index / ESG Data

Location of Nissha Information Posted

Pages
on PDFGRI 3: Material Topics
2021

3-1

Process to determine material topics 3-4-1 Materiality Identification

3-3

List of material topics

3-4 Materialities (Key Issues) and KPIs

3-3

Management of material topics

3-4-1 Materiality Identification

3-3

4-1

4. Environmental Policy and Management Structures

4-1

13-1 Basic Policy

13-1

6. Responding to Climate Change (Addressing the TCFD
Recommendations)6-1

27. Internal Control System

26, 2728-2

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

12-1

28-2 Guidelines
7. CO2 Emissions and Reduction Efforts

7-1
13-2

13-1 Basic Policy, 13-2 Structure, 13-3 Initiatives Related toLabor and Human Rights

13-1

13-3 Initiatives Related to Labor and Human Rights
27. Internal Control System

26, 27

14-1 Policy, 14-2 New Human Resources System, 14-3 ESG
Task Force Initiatives, 14-4 Talent Management System

14-1

28-5 Promotion of Corporate Ethics and Compliance28-4

28-6 Hotline

28-5

2-26

Mechanisms for seeking advice andraising concerns

13-4 Harassment Prevention

13-3

28-6 Hotline

28-5

2-27

Compliance with laws andregulations

10. Management of Chemical Substances and Environmental
Risks

10-1

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

12-1

21-4 CSR Audit and SAQ

21-2

31. Anti-corruption

31

3-5-1 Initiatives in which Nissha participate

3-8

22-3 Membership in Community Organizations (Nissha)

22-2

5. Stakeholder engagement
2-29

Approach to stakeholder
engagement

3-6 Nissha Group Stakeholders

3-11

2-30

Collective bargaining agreements

13-5 Relationship with Labor Union

13-3

Nissha Sustainability Report 2023

Disclosure Item

Governance

3-2

Processes to remediate negative
impacts

Membership associations

GRI Standards

Quality Management / Efficiency
and Productivity Improvement

3-3

2-25

2-28

Fair Operating Practices/ Local Communities

Material Topics

4. Strategy, policies and practices

2-24

Governance16-2 Training systems, 16-3 Support for employees' voluntary 16-2
desires to learn and grow, 16-4 Career planning support, 16-6In-house training programs
18-1 Policy and Principles, 18-2 Safety and HealthManagement System

18-1

21-1 Basic Policy > CSR Procurement Guidelines

21-1

23-1 Policy / Nissha Quality Way

23-1

27. Internal Control System

26, 2728. Risk Management and Compliance

28-1

29. Information Security

29-1

30. Trade Management

30-1

32. Business Continuity

32-1

33. Tax Principle

33

36-2

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item

SocialThird Party
Verification

Human
RightsLocation of Nissha Information Posted

Human
Resources

GovernanceFair Operating Practices/ Local Communities

Pages
on PDFGRI Standards

Economic

Disclosure Item
205-2

201-1

Direct economic value generated
and distributed

201-2

Financial implications and other risks 4-3 Environmental Management System (EMS)
and opportunities due to climate
6. Responding to Climate Change (Addressing the TCFD
changeRecommendations)Website > Investors > IR Library > Securities Report (only inJapanese)

28. Risk Management and Compliance

4-2

Anti-competitive behavior

6-1

GRI 206：Anticompetitive Behavior
2016

28-1

Website > Investors > IR Library > Securities Report (only inJapanese)
201-3

201-4

Defined benefit plan obligations and 17-15 Retirement Pay Systemother retirement plans
Website > Investors > IR Library > Securities Report (only inJapanese)
Financial assistance received fromgovernment-

GRI 202：Market
Presence 2016

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

Proportion of senior management
hired from the local community

15-1 Nissha Group Employee Composition

17-6

Pages
on PDF

28. Risk Management and Compliance

28-1

31. Anti-corruption

31

205-3

Confirmed incidents of corruption
and actions taken

31. Anti-corruption

31

206-1

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

N/A

207-1

Approach to tax

33. Tax Principle

33

207-2

Tax governance, control, and risk
management

33. Tax Principle

33

207-3

Stakeholder engagement and
33. Tax Principle
management of concerns related to
tax

33

207-4

Country-by-country reporting

-

301-1

Materials used by weight or volume

5. Impact on the Environment out of Our Business Operations

301-2

Recycled input materials used

-

301-3

Reclaimed products and theirpackaging materials

-

302-1

Energy consumption within theorganization

5. Impact on the Environment out of Our Business Operations
7. CO2 Emissions and Reduction Efforts

7-1

302-2

Energy consumption outside of theorganization

7-6 Initiative in Scope 3 Management

7-3

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. CO2 Emissions and Reduction Efforts

7-1

302-5

Reductions in energy requirements
of products and services

Materials

15-1

GRI 301：Materials
2016

Indirect economic impacts
203-1

203-2

Infrastructure investments andservices supported-

Significant indirect economic
impacts-

204-1

Proportion of spending on local
suppliers

5-1

EnergyGRI 302：Energy
2016

Procurement practices
GRI 204：
Procurement Practices
2016

Location of Nissha Information Posted

Environmental
202-1

202-2

GRI 203：Indirect
Economic Impacts
2016

GRI Standards Content
Index / ESG Data

Tax
GRI 207: Tax 2019Market presence

GovernanceCommunication and training
about anti-corruption policies andprocedures

Economic performanceGRI 201: Economic
Performance 2016

Quality Management / Efficiency
and Productivity Improvement-

5-1

Anti-corruption
GRI 205：Anticorruption 2016

205-1

Operations assessed for risks related
to corruption

Nissha Sustainability Report 2023

-

-

36-3

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Third Party
Verification

Environment

Disclosure Item

SocialHuman
RightsLocation of Nissha Information Posted

Human
Resources

Pages
on PDF

Fair Operating Practices/ Local Communities

GRI Standards

Water and effluentsGRI 303：Water andEffluents 2018

303-1

Interactions with water as a sharedresource

11-3 Understanding water stress areas, 11-4 Management of 11-1
Water Intake and Wastewater, 11-5 Initiatives for Appropriate
Water Use, 11-6 Water Data

303-2

Management of water dischargerelated impacts

10-6 Prevention of Water Pollution

10-5

11-1 Basic Concept, 11-3 Understanding water stress areas,
11-4 Management of Water Intake and Wastewater

11-1

5. Impact on the Environment out of Our Business Operations

5-1

303-4

303-5

Water withdrawal

Water discharge

Water consumption

11-6 Water Data

11-2

5. Impact on the Environment out of Our Business Operations

5-1

10-6 Prevention of Water Pollution

10-5

11-6 Water Data

11-2

GRI 306：Waste 2020

304-2

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

GHG emissions intensity

GRI Standards Content
Index / ESG Data

Location of Nissha Information Posted

Pages
on PDF

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

5. Impact on the Environment out of Our Business Operations

5-1

7. CO2 Emissions and Reduction Efforts

7-1

305-5

Reduction of GHG emissions

305-6

Emissions of ozone-depleting
substances (ODS)

305-7

Nitrogen oxides (NOx), sulfur oxides 5. Impact on the Environment out of Our Business Operations(SOx), and other significant air
emissions
7-3 Trends in CO2 Emissions and Energy Consumption, etc.

5-1
7-2

10-8 Prevention of Air Pollution

10-7

306-1

Waste generation and significant
waste-related impacts

9-2 Risk Management Related to Waste and Waste Converted
in Valuable Resources

9

306-2

Management of significant wasterelated impacts

9-2 Risk Management Related to Waste and Waste Converted
in Valuable Resources

9

306-3

Waste generated

5. Impact on the Environment out of Our Business Operations

5-1

9-1 Total amount of waste generated by Nissha Group

9

306-4

Waste diverted from disposal

5. Impact on the Environment out of Our Business Operations

5-1

9-1 Total amount of waste generated by Nissha Group9

5. Impact on the Environment out of Our Business Operations

5-1

9-1 Total amount of waste generated by Nissha Group9

10. Management of Chemical Substances and Environmental
Risks

10-1

-

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 byoperations-

Direct (Scope 1) GHG emissions

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

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

12-1

7. CO2 Emissions and Reduction Efforts

7-1

21-4 CSR Audit and SAQ

21-2

306-5

Emissions
GRI 305：Emissions
2016

305-4

Other indirect (Scope 3) GHG
emissions

Governance

Waste

-

Biodiversity
304-1

Quality Management / Efficiency
and Productivity Improvement

Disclosure Item
305-3

303-3

GRI 304：Biodiversity
2016

GovernanceWaste directed to disposal

Environmental compliance
305-1

305-2

Energy indirect (Scope 2) GHG
emissions

Nissha Sustainability Report 2023

GRI 307：
Environmental
Compliance 2016

307-1

Non-compliance withenvironmental laws and regulations

36-4

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item

Third Party
Verification

SocialHuman
RightsLocation of Nissha Information Posted

Human
Resources

Pages
on PDF

Fair Operating Practices/ Local Communities

GRI Standards

Supplier environmental assessment
GRI 308：Supplier
Environmental
Assessment 2016308-1

New suppliers that were screenedusing environmental criteria

-

308-2

Negative environmental impacts inthe supply chain and actions taken

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

12-1

21-1 Basic Policy, 21-2 Maintaining purchasing related rules,
21-3 Nissha Group Supply Chain, 21-4 CSR Audit and SAQ

21-1

SocialTraining and education

Employment

GRI 404：Training and
Education 2016

GRI 401：Employment
2016

Governance

Disclosure Item

Location of Nissha Information Posted

Pages
on PDF

Prevention and mitigation ofoccupational health and safety
impacts directly linked by business
relationships

18-1 Policy and Principles, 18-2 Safety and HealthManagement System, 18-3 Initiatives for FY2022

18-1

403-8

Workers covered by an occupational
18-1 Policy and Principles, 18-2 Safety and Healthhealth and safety management system Management System

18-1

403-9

Work-related injuries

18-4 Occurrence of Occupational Accidents

18-2

403-10Work-related ill health18-4 Occurrence of Occupational Accidents

18-2

404-1

Average hours of training per year
per employee

16-5 Training records

16-3

404-2

Programs for upgrading employee
skills and transition assistanceprograms

14-4 Talent Management System

14-3

15-4 Promotion of Women's Advancement

15-3

16. Human Resources Development

16-1

New employee hires and employee
turnover15-1 Nissha Group Employee Composition

401-2

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

Parental leave

17-4 Child-rearing and Family Care Support

17-2

17-11 Internal Job Posting System、17-12 Awarding system(Nissha Group)、17-13 Career Resumption Program

17-5

Minimum notice periods regarding
operational changes

13-5 Relationship with Labor Union

13-3

20-2 Initiatives > Training

20

21-5 Development of procurement personnel

21-3

29-5 Training

29-2

Occupational health and safety
management system

18-1 Policy and Principles, 18-2 Safety and HealthManagement System402-1

Occupational health and safety
GRI 403：
Occupational Healthand Safety 2018

GRI Standards Content
Index / ESG Data

403-7

Labor/management relations
GRI 402：Labor/
Management
Relations 2016

Governance

401-1

401-3

15-1

Quality Management / Efficiency
and Productivity Improvement

403-1

18-1
404-3

403-2

Hazard identification, risk
assessment, and incident
investigation

35. Management System and Other Certification Acquisitions

35-1

18-1 Policy and Principles, 18-2 Safety and HealthManagement System, 18-3 Initiatives for FY2022

18-1

32-3 Initiatives, Risk Surveys

32-2

30-2

14-5 Fair evaluation and treatment

14-3

Diversity of governance bodies andemployees

15-1 Nissha Group Employee Composition

15-1

25-3 Directors of the Board and the Board of Directors >Skills and Diversity Required of Directors of the Board, 25-7
Corporate Officers > Diversity of Corporate Officers

25-3

14-3

Diversity and equal opportunity
GRI 405：Diversity
and Equal Opportunity
2016

403-3

Occupational health services

18-1 Policy and Principles, 18-2 Safety and HealthManagement System, 18-3 Initiatives for FY2022

18-1

403-4

Worker participation, consultation,and communication on
occupational health and safety

18-1 Policy and Principles, 18-2 Safety and HealthManagement System, 18-3 Initiatives for FY2022

18-1

403-5

Worker training on occupational
health and safety

18-5 Safety and Health Education and Training

18-2

Non-discrimination

403-6

Promotion of worker health19. Health and Productivity Management

19-1

GRI 406：Nondiscrimination 2016

Nissha Sustainability Report 2023

30-5 Training
Percentage of employees receiving
regular performance and careerdevelopment reviews

405-1

405-2

Ratio of basic salary andremuneration of women to men

14-6 Wage Management

406-1

Incidents of discrimination andcorrective actions taken

-

36-5

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

GRI Standards

Environment

Disclosure Item

Third Party
Verification

SocialHuman
RightsLocation of Nissha Information Posted

Human
Resources

Pages
on PDF

Fair Operating Practices/ Local Communities

GRI Standards

Freedom of association and collective bargaining
GRI 407：Freedomof Association andCollective Bargaining
2016

407-1

408-1

409-1

410-1

411-1

414-1

New suppliers that were screenedusing social criteria

-

414-2

Negative social impacts in the supply 21-1 Basic Policy, 21-2 Maintaining purchasing related rules,
chain and actions taken
21-3 Nissha Group Supply Chain, 21-4 CSR Audit and SAQ

21-1 Basic Policy, 21-2 Maintaining purchasing related rules,
21-3 Nissha Group Supply Chain, 21-4 CSR Audit and SAQ

21-1

Operations and suppliers at
significant risk for incidents of childlabor

13-1 Basic Policy, 13-3 Initiatives Related to Labor andHuman Rights

13-1

21-1 Basic Policy, 21-2 Maintaining purchasing related rules,
21-3 Nissha Group Supply Chain, 21-4 CSR Audit and SAQ

21-1

Operations and suppliers at
13-1 Basic Policy, 13-3 Initiatives Related to Labor andsignificant risk for incidents of forced Human Rights
or compulsory labor21-1 Basic Policy, 21-2 Maintaining purchasing related rules,
21-3 Nissha Group Supply Chain, 21-4 CSR Audit and SAQ

13-1

GRI 415：Public Policy
2016

21-1

Customer health and safety

GRI 414：SupplierSocial Assessment
2016

GRI 416：Customer
Health and Safety
2016

Security personnel trained in human rights policies or procedures

Incidents of violations involving
rights of indigenous peoples

-

412-1

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

13-3 Initiatives Related to Labor and Human Rights

13-2

21-4 CSR Audit and SAQ

21-2

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-

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

-

413-1

21-1

34-1

Public policy
415-1

Nissha Sustainability Report 2023

Political contributions

-

416-1

Assessment of the health and safety impacts of product and service
categories

416-2

Incidents of non-complianceconcerning the health and safety
impacts of products and services

23-6 Quality and Safety of Products

417-1

Requirements for product andservice information and labeling

-

417-2

Incidents of non-complianceconcerning product and service
information and labeling

-

417-3

Incidents of non-complianceconcerning marketing
communications

-

418-1

Substantiated complaints
concerning breaches of customer
privacy and losses of customer data-Non-compliance with laws andregulations in the social andeconomic area

-

23-4

Marketing and labeling
GRI 417：Marketingand Labeling 2016

Customer privacy
GRI 418：Customer
Privacy 2016

Local communities
GRI 413：Local
Communities 2016

Pages
on PDF

Supplier social assessment

34. Responsible Mineral Procurement

Human rights assessment
GRI 412：Human
Rights Assessment
2016

Location of Nissha Information Posted-

Rights of indigenous peoples
GRI 411：Rights ofIndigenous Peoples 2016

GRI Standards Content
Index / ESG Data

Operations with significant actualand potential negative impacts on
local communities

13-3

Security practices
GRI 410：Security
Practices 2016

Governance413-2
13-5 Relationship with Labor Union

Forced or compulsory labor
GRI 409：Forced orCompulsory Labor
2016

Quality Management / Efficiency
and Productivity Improvement

Disclosure Item

Operations and suppliers in which
the right to freedom of associationand collective bargaining may be at
riskChild labor
GRI 408：Child Labor
2016

Governance

Socioeconomic compliance
GRI 419：
Socioeconomic
Compliance 2016

419-1

36-6

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

GRI Standards Content
Index / ESG Data

Governance

37. 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 FY2018 to FY2022 are collected for eachtheme. In addition, a list of policies, principles and guidelines is posted at the end of this document.

Items
Ink and others

Others*2

Unit

Boundaryt

Production basesin Japan

FY2018FY2019FY2020

FY2021

FY2022

139

83

75

84

72

*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.
* 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.

Total input (Overseas production bases)tOverseas
production bases

90,732

81,786

93,553 104,449 104,868

Resin

t

Overseas
production bases

5,394

1,636

1,290

4,506

6,075

Molds and their materialstOverseas
production bases

90

85

90

120

113

Touch sensorstOverseas
production bases

1

0

0

0

0

Paper

t

Overseas
production bases

77,217

69,63078,391

88,131

88,318CardboardstOverseas
production bases

179

1,391

1,752

1,073

123

AluminumtOverseas
production bases

213

140

2,594

2,218

1,991

Chemical substancestOverseas
production bases

6,391

5,204

6,560

6,105

6,551

OtherstOverseas
production bases

367

1,571

1,031

568

1,438

Electricity

MWhProduction basesin Japanand overseas

285,404

274,593 257,464 264,973 250,732

Gas

Thousand m3

Production basesin Japannd overseas

10,410

11,585

9,085

10,558

10,485

Tap water

Thousand m3

Production basesin Japanand overseas

1,252

1,291

1,287

1,249

993

Underground water

Thousand m3

Production basesin Japanand overseas

10

103

40

46

49

Industrial water

Thousand m3

Production basesin Japanand overseas

2,158

1,943

1,725

1,670

1,549

• NPT: Nitec Precision and Technologies, Inc.

Environment
Items

Unit

Boundary

FY2018FY2019FY2020

FY2021

FY2022

5. Impact on the Environment out of Our Business Operations
Total inputtNissha Group

118,586

101,398 114,036 127,430 123,982

Total input (production bases in Japan)t

Production basesin Japan27,853

19,612

20,482

22,981

19,114

PET/acryl film

Industrial Materialst

Production basesin Japan

1,311

1,123

978

1,165

1,057

Solvents

Industrial Materialst

Production basesin Japan

1,099

841

686

843

748

Ink and others

Industrial Materialst

Production basesin Japan

1,001

858

778

845

811

t

Production basesin Japan

15,522

10,702

12,103

13,72911,244

Materials used in manufacturing processes

Devices

EnergyOthersDevicest

Production basesin Japan

2,064

1,621

1,849

Product materials

Medical Technologies*1tProduction basesin Japan

n/a

n/a

n/a

Paper

Others*2t

Production basesin Japan

6,534

4,348

3,958

Nissha Sustainability Report 2023

1,589

900

55

73

4,424

3,764

Water

37-1

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Items

Environment

SocialThird Party
Verification

Boundary

Total output (production bases in Japan)t

Production basesin Japan

21,994

16,437

18,53817,465

13,606

Recyclable resources (items sold for recycling)t

Production basesin Japan

8,735

5,877

6,406

5,743

4,203

Recyclable resources (industrial waste)t

Production basesin Japan

13,23010,537

12,105

11,697

9,380

Waste for simple incineration/landfilltProduction basesin Japan

29

23

27

25

22

231

t

Overseas
production bases

Recyclable resources (items sold for recycling)tOverseas
production bases

Recyclable resources (industrial waste)tt

Non-recyclable waste

FY2019FY2020

Human
Resources

Unit

Total output (Overseas production bases)

FY2018Human
Rights

FY2021

Fair Operating Practices/ Local Communities

FY2022

9,156

11,397

13,121

13,601

n/a

7,272

8,433

9,838

10,904

Overseas
production bases

n/a

666

1,369

1,335

877

Overseas
production bases

n/a

1,218

1,595

1,948

1,819

t

Production basesin Japanand overseas

1,069

Thousand m3

Production basesin Japanand overseas

3,334

Production basesin Japanand overseas

23,567t-CO2

Production basesin Japanand overseas

161,003

Total

t-CO2

Production basesin Japanand overseas

184,570 147,266

124,204 125,244 114,691

Production bases in Japan

t-CO2

Production basesin Japan131,653 106,788*1

85,570t-CO2Overseas
production bases

52,91740,478*1

38,634

41,592

49,885t-CO2/
Millionyen

Production basesin Japanand overseas

0.89

0.85*1

0.69

0.66

0.59

Wastewater

808

3,305

700

3,033

826

2,594

Items

Scope 3, CO2 emissions

752

2,342

7. CO2 Emissions and Reduction Efforts
Scope 1, CO2 emissions

t-CO2

Scope 2, CO2 emissions

CO2 emissions

Overseas production bases

CO2 emissions basic unit of net sales

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement

Unit

Boundary

Governance

FY2018FY2019GRI Standards Content
Index / ESG Data

FY2020

FY2021

FY2022* Through FY2018 and 2019, CO2 emission coecients were fixed values. However, in FY2020 and beyond, these are derived from data calculatedusing market-based method for Japan and location-based method for overseas.
*1. These are derived from data calculated using market-based method for Japan and location-based method for overseas.

*The scope of data collection of total waste generated at overseas production bases were expanded from the FY ended December 2019.
VOC

Governance

Total

t-CO2

-

18,162

56,796

67,90338,854 117,496

Purchased goods andservices

t-CO2

-

n/a

n/a

n/a

n/a

50,616*

Capital goods

t-CO2

-

n/a

n/a

n/a

n/a

17,126

Fuel and energy-related
activities (not included in
Scope 1, 2)

t-CO2

-

n/a

n/a

n/a

n/a

15,684

Upstream transportationand distribution of purchased products

t-CO2

-

10,96948,68245,646

18,603

11,096*

Upstream transportationand distribution of shipments

t-CO2

-

3,242

4,553

19,72017,766

7,398*

Waste generated in operations

t-CO2

-

n/a

n/a

n/a

n/a

4,462

Business travel

t-CO2

-

1,528

1,214

293

281

579*

Employee commuting

t-CO2

-

2,423

2,347

2,244

2,204

2,261*

Use of sold products

t-CO2

-

n/a

n/a

n/a

n/a

7,739*End of life treatment ofsold products

t-CO2

-

n/a

n/a

n/a

n/a

535

* Some of these figures include those certified by a third party.
26,603

20,85324,196

152,399 103,351 101,048*183,65228,43586,255

Energy consumption

Total

Thousand GJ

Production basesin Japanand overseas

3,328

3,266

2,966

3,124

2,662

Production bases in Japan

Thousand GJ

Production basesin Japan

2,372

2,208

1,999

2,040

1,607

Overseas production bases

Thousand GJ

Overseas
production bases

956

1,058

967

1,084

1,055

ThouProduction bases
sand GJ/
in JapanMillionand overseas
yen0.01600.01890.01650.01650.013764,806
Energy consumption basic unit of net sales

37-2

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Items

Electricity consumption

Gas consumption

Gasoline, diesel, and heavy
oil consumption

Environment

SocialThird Party
Verification

FY2018Human
Rights

FY2019FY2020

Human
Resources

Unit

Boundary

Total

MWh

Production basesin Japanand overseas

FY2021

290,095

274,593 257,464 264,973 250,732

Production bases in Japan

MWh

Production basesin Japan

213,581

197,029 183,200 182,488 158,335

Overseas production bases

MWhOverseas
production bases

76,51477,56374,264

82,48592,397

Total

Thousand m3

Production basesin Japanand overseas

10,410

11,585

9,085

10,558

10,485

Production bases in Japan

Thousand m3

Production basesin Japan

5,769

5,359

4,166

4,865

4,782

Overseas production bases

Thousand m3

Overseas
production bases

4,641

6,226

4,919

5,694

5,703

Total

kl

Production basesin Japanand overseas

154

246

205

220

Production bases in Japankl

Production basesin Japan

98

97

72

Overseas production bases

klOverseas
production bases

56

150

133

Fair Operating Practices/ Local Communities

FY2022

Items

Nissha Group in
Japan

99.9

99.9

99.9

FY2018FY2019FY2020

FY2021

FY2022N-hexane

mg/l

0.6

<0.5

<0.5

<0.5

<0.5

Phenolmg/l

NPT Himeji
Factory＜ 0.005<0.005<0.005<0.005<0.005

Coppermg/l

NPT Himeji
Factory

0.14

0.04

0.05

0.02

0.01

Zinc

mg/l

NPT Himeji
Factory＜ 0.01

<0.01

<0.01

<0.01

<0.01

Soluble ironmg/l

NPT Himeji
Factory＜ 0.01

0.02

0.03

0.03

0.03

Soluble manganesemg/l

NPT Himeji
Factory

0.05

0.04

0.04

0.04

0.02

Chromium

mg/l

NPT Himeji
Factory＜ 0.02

<0.02

<0.02

<0.02

<0.02

207

Nitrogenmg/l

NPT Himeji
Factory

4.8

8.0

4.2

4.5

4.3

70

60

Phosphorus

mg/l

NPT Himeji
Factory

0.05

0.19

0.02

0.03

0.02

151

147

-

NPT Kaga Factory

7.4

7.5

7.5

7.4

7.6

99.9

99.8

Measurements of Wastewater Quality, NPT Himeji Factory

Measurements of Wastewater Quality, NPT Kaga Factory

BOD

COD
m3

NPT Himeji
FactorypH-

NPT Himeji
Factory

6.9 / 7.6

6.9 / 7.6

6.8 / 7.5

6.9 / 7.5

6.8 / 7.4

BOD

mg/l

NPT Himeji
Factory

2.9

2.8

4.0

3.7

2.6

COD

mg/l

NPT Himeji
Factory

4.6

7.3

5.2

4.4

4.8

SS

mg/l

NPT Himeji
Factory

3.7

1.6

1.9

2.6

1.1

Nissha Sustainability Report 2023

4,934

4,655

4,156

GRI Standards Content
Index / ESG Data

Boundary

10. Management of Chemical Substances and Environmental Risks

Discharged water

Governance

NPT Himeji
FactorypH%

Quality Management / Efficiency
and Productivity Improvement

Unit

9. Waste Management
Recycling and resource reuse rate

Governance

4,150

3,854
SS

N-hexane

Final effluent (Average)
Final effluent (Maximum)-

NPT Kaga Factory

7.7

7.5

7.7

7.7

7.7

Final effluent (Average)

mg/l

NPT Kaga Factory

32.6

21.9

23.4

23.3

17.4

Final effluent (Maximum)

mg/l

NPT Kaga Factory

56.0

34.0

40.0

35.0

24.0

Final effluent (Average)

mg/l

NPT Kaga Factory

55.3

34.0

33.5

37.7

25.8

Final effluent (Maximum

mg/l

NPT Kaga Factory

93.0

47.0

47.0

44.0

36.0

Final effluent (Average)

mg/l

NPT Kaga Factory

28.2

9.1

6.3

6.0

7.7

Final effluent (Maximum)

mg/l

NPT Kaga Factory

63.0

18.0

23.0

10.0

21.0

Final effluent (Average)

mg/l

NPT Kaga Factory

0.5

0.6

0.6

0.5

0.5

Final effluent (Maximum)

mg/l

NPT Kaga Factory

0.5

0.8

0.9

0.5

0.5

37-3

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Items

Environment

Unit

Boundary

SocialThird Party
Verification

FY2018Human
Rights

FY2019FY2020

Human
Resources

FY2021GovernanceFair Operating Practices/ Local Communities

FY2022Items

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

587

463

286

928

494

Discharge into the atmospherekg

NII Koka Factory

9,904

9,937

15,745

10,524

12,022

Transferred to industrial
waste processing companieskg

NII Koka Factory

4,026

4,075

6,431

4,298

4,910

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

850*

0

Discharge into the atmospherekg

NII Koka Factory

299

265

25

59

1

Transferred to industrial
waste processing companieskg

NII Koka Factory

107

95

10

24

0.3

Discharge into the atmospherekg

NII Koka Factory

83,927

100,846

61,535 106,873

57,728Transferred to industrial
waste processing companieskg

NII Koka Factory

36,831

5,520

25,13443,652

23,579Discharge into the atmospherekg

NII Koka Factory

8,371

4,518

601

258

0

Transferred to industrial
waste processing companieskg

NII Koka Factory

2,375

2,741

245

105

0

NII Koka Factory

1,444

1,211

710

2,273

1,211

Quality Management / Efficiency
and Productivity Improvement

453 Molybdenum and its
compounds

GRI Standards Content
Index / ESG Data

Governance

Unit

Boundary

FY2018FY2019FY2020

FY2021

FY2022

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 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

0

Transferred to industrial
waste processing companies

kg

NPT Kaga Factory

n/a

n/a

n/a

n/a

0

PRTR-designated chemical substances, NPT Kaga Factory

71 Ferric chloride

272 Water-soluble copper
salts (excluding complex
salt)

627 Diethylene glycol
monobutyl ether

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

NumberNissha Group in
Japan

0

0

0

1*1

1*2

*1. In FY2021, there was one chemical leak accident at the NII Koka Factory, but it did not have a significant environmental impact.
*2. In FY2022, a delivery companyʼs truck experienced a fuel leak at Nissha FIS, Inc., but it did not have a significant environmental impact.

* The increase in the transfer amount of hexavalent chromium compounds transferred in FY2021 was due to the disposal of materials no longer
needed as a result 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

2,023.1

1,352.8

1,820.2

2,677.4

2,491.4

Nissha Sustainability Report 2023

37-4

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

SocialThird Party
Verification

Human
RightsHuman
Resources

Human Rights
Items

Fair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

GRI Standards Content
Index / ESG Data

Governance

Human Resources
Unit

Boundary

FY2018FY2019FY2020

FY2021Items

FY2022

Unit

Boundary

FY2018 FY2019 FY2020 FY2021 FY2022

14. Human Resources System

13. Human Rights
Harassment Help Desk number of consultations

NumberNissha Group

8

9

8*1

12*1

Gap between male and female in terms of wages-*2*1. 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 in the FY2020 and FY2021.
*2. As the Harassment Help Desk (internal consultation service) and the Hotline have been shared since July 2022, the information has been consolidated into the number of cases reported to the Hotline.

Membership ofLabor Union

Governance

Total

NumberNissha Group in Japan

1,386

1,308

1,133

The Nissha Labor Union

NumberNissha Group in Japan

765

739

649

The Nitec Industries Labor
Union

NumberNissha Group in Japan

436

433

354

1,106

1,051

-

-

-

Full-time workers

Non-regular workers

-

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

76.3

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

77.7

Male

-

Nissha

n/a

n/a

n/a

n/a

100

Female-Nissha

n/a

n/a

n/a

n/a

56.2

* Only FY2022 is shown due to a change in the aggregation method from the fiscal year ended December 2022.

The Nissha Printing CommuniNumber
cations Labor Union

Nissha Group in Japan

185

136

130

-

* The figures show a comparison of female with a male wages set at 100.

-

* Wages include bonuses, overtime allowance, commuting allowance, and family allowance, etc.
* The treatment of full-time workers is the same for male and female. The difference is due to differences in the grade structure due to the different* 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

All workers

NumberNissha Group in Japan

0

0

0

0

average lengths of service between male and female.
0* Non-regular workers include employees who are treated differently, such as contract employees who are rehired after mandatory retirement andemployees working under individual labor contracts. The main reason for the gap between male and female is the large proportion of male inmanagerial staff roles despite their non-regular employment.
15. 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 2023

NumberNissha Group

8

8

8

8

8

Total

Number

-

2,362

2,300

1,988

1,990

1,915

Male

Number

-

1,930

1,853

1,587

1,574

1,500

FemaleNumber

-

432

447

401

416

415

Total

Number

-

812

720

674

661

633

Male

Number

-

402

336

310

312

319

FemaleNumber

-

410

384

364

349

314

Total

Number

-

551

523

680

698

693

Male

Number

-

351

346

478

505

488

FemaleNumber

-

200

177

202

193

205

37-5

Environment
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 2023

SocialThird Party
Verification

Environment

Unit

Boundary

Number-Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

FY2018 FY2019 FY2020 FY2021 FY2022
1,160

1,577

1,509

1,539

Governance

Items

1,151

Male

Number

-

712

918

841

873

690

FemaleNumber

-

448

659

668

666

461

Total

Number

-

959

598

539

521

933

Male

Number

-

437

239

216

206

365

Quality Management / Efficiency
and Productivity Improvement

Average age

Average years of employment

Governance

GRI Standards Content
Index / ESG Data

Unit

Boundary

Average

Age

Nissha

FY2018 FY2019 FY2020 FY2021 FY2022
40.7

39.8

41.5

42.2

42.9

Male

Age

Nissha

42.1

42.9

43.0

43.8

44.7

FemaleAge

Nissha

36.5

36.7

37.3

37.8

38.2

AverageYear

Nissha

13.5

13.2

14.4

14.3

15.7

Male

Year

Nissha

14.5

15.3

15.4

15.6

17.2

FemaleNumber

-

522

359

323

315

568

FemaleYear

Nissha

10.7

11.0

11.5

10.8

11.8

Total

NumberNissha Group

5,844

5,718

5,390

5,409

5,325

Total

NumberNissha

4

2

0

2

2

Male

NumberNissha Group

3,832

3,692

3,432

3,470

3,362

Male

NumberNissha

1

0

0

0

0

Composition by age (18-19)

FemaleNumberNissha Group

2,012

2,026

1,958

1,939

1,963

FemaleNumberNissha

3

2

0

2

2

Total

NumberNissha Group

2,325

1,741

2,012

1,443

1,438

Total

NumberNissha

125

116

94

82

72
33

Male

NumberNissha Group

1,666

1,209

1,429

866

865

Male

NumberNissha

71

63

54

42

FemaleNumberNissha Group

659

532

583

577

573

FemaleNumberNissha

54

53

40

40

39

Total

NumberNissha

9

9

9

9

9

Total

NumberNissha

267

246

217

217

193

Male

NumberNissha

7

8

8

8

8

FemaleNumberNissha

1

1

1

1

1

Total

NumberNissha

12

12

11

12

12

Male

NumberNissha

12

12

11

12

12

Composition by age (20-29)

Composition by age (30-39)

Composition by age (40-49)

Male

NumberNissha

189

164

133

135

117

FemaleNumberNissha

78

82

84

82

76

Total

NumberNissha

275

281

262

269

261

Male

NumberNissha

221

225

214

218

205

FemaleNumberNissha

0

0

0

0

0

FemaleNumberNissha

54

56

48

51

56

Total

NumberNissha

1

1

2

2

1

Total

NumberNissha

144

172

145

155

175

Male

NumberNissha

1

1

2

2

1

Male

NumberNissha

130

156

129

134

152

Composition by age (50-59)

FemaleNumberNissha

0

0

0

0

0

FemaleNumberNissha

14

16

16

21

23

Total

NumberNissha

172

172

153

166

163

Total

NumberNissha

4

2

2

6

7
6

Male

NumberNissha

161

162

145

157

153

Male

NumberNissha4

1

1

5

FemaleNumberNissha

11

10

8

9

10

FemaleNumberNissha

0

1

1

1

1

Total

NumberNissha

819

819

720

731

710

Total

NumberNissha Group

5,844

5,718

5,390

5,409

5,325

Male

NumberNissha

616

609

531

534

513

FemaleNumberNissha

203

210

189

197

197

Composition by age (over 60)

Number of employees

Male

NumberNissha Group

3,832

3,692

3,432

3,470

3,362

FemaleNumberNissha Group

2,012

2,026

1,958

1,939

1,963

37-6

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Items

Composition of managerial staff

Third Party
Verification

Environment

Unit
Male

SocialBoundary

Number Nissha Group in Japan

Human
RightsHuman
Resources

n/a

273

281

Number Nissha Group in Japan

n/a

n/a

13

14

15

Total

Number Nissha Group in Japan

n/a

n/a

286

295

284

Number Nissha Group in Japan

n/a

n/a

86

94

91

employees
Of which foreign
employees

n/a

n/a

2

2

Reinstatement rate after childrearing leave

Retention rate after child-rearing%

Nissha

2.18

2.38

2.11

2.12

Number of employees who usedfamily care leave
2.07

16. Human Resources Development

Annual training hours

Training hours per employee

Total

Hours

Nissha Group in Japan 26,850 22,265 26,337 42,426 30,613

Male

Hours

Nissha Group in Japan 19,573 17,768 19,092 28,928 23,252

FemaleHours

Nissha Group in Japan

7,277

4,497

7,245 13,498

Number of employees who usedshorter hours for family care

7,361

Average

Hours

Nissha Group in Japan

11.4

9.7

13.1

18.2

14.4

Male

Hours

Nissha Group in Japan

10.2

9.6

11.8

16.4

14.2

FemaleHours

Nissha Group in Japan

16.8

10.0

17.9

24.0

15.3

Number of employees who useddays off for family care

Number of employees who used

* From FY2019 onward, contract employees are included in the total.

outpatient sick leave system

Average days of annual paid leave used

Days

Nissha Group in Japan

11.0

12.2

11.4

11.5

12.9

Average percentage of annual paid leave used%

Nissha Group in Japan

60.4

65.9

61.4

60.3

66.1

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 2023

Boundary%

Nissha Group in Japan

FY2018 FY2019 FY2020 FY2021 FY2022
100

96.8

100

97.1

97.6

%

Nissha Group in Japan

100

100

100

100

100

%

Nissha Group in Japan

100

95.0

100

95.6

95.8

Average%Nissha Group in Japan

96.3

93.5

90.0

88.5

94.7

Male

%

Nissha Group in Japan

83.3

100

92.0

83.3

87.5

%

100

Nissha Group in Japan

100

90.0

88.6

91.3

Total

Number Nissha Group in Japan

1

4

1

0

0

Male

Number Nissha Group in Japan

1

3

1

0

0

FemaleNumber Nissha Group in Japan

0

1

0

0

0

Total

Number Nissha Group in Japan

1

1

0

0

0

Male

Number Nissha Group in Japan

0

0

0

0

0

FemaleNumber Nissha Group in Japan

1

1

0

0

0

Total

Number Nissha Group in Japan

16

17

15

6

12

Male

Number Nissha Group in Japan

8

12

8

5

6

FemaleNumber Nissha Group in Japan

8

5

7

1

6

Total

Number Nissha Group in Japan

2

3

4

6

9

Male

Number Nissha Group in Japan

1

1

2

3

5

Number Nissha Group in Japan

1

2

2

3

4

Number Nissha Group in Japan

15

9

0

15

31

Total

Number Nissha Group in Japan

3

5

n/a

7

2

Number of internal job posting

Total

Number Nissha Group in Japan

59

61

69

67

73

Male

Number Nissha Group in Japan

2

4

n/a

6

2

Male

Number Nissha Group in Japan

14

18

19

21

25

FemaleNumber Nissha Group in Japan

1

1

n/a

1

0

CEO's Award (Company-

FemaleNumber Nissha Group in Japan

45

43

50

46

48

Total

Number Nissha Group in Japan

89

97

95

89

95

Male

Number Nissha Group in Japan

8

7

2

2

3

FemaleNumber Nissha Group in Japan

81

90

93

87

92

Total

Number Nissha Group in Japan

145

157

120

108

115

Male

Number Nissha Group in Japan

67

79

56

49

50

FemaleNumber Nissha Group in Japan

78

78

64

59

65

Successful applicants (transferees)

Unit

Male

Female17. Employee Engagement

GRI Standards Content
Index / ESG Data

GovernanceFemaleFemale1* Figures as of the end of FY2020 and the end of FY2021 have been revised due to a review of the aggregation method in accordance with thedisclosure in our Annual Securities Report.
Percentage of persons with disabilities employed

Averageleave (1 year)
Number Nissha Group in Japan

Quality Management / Efficiency
and Productivity Improvement

Items

269

FemaleOf which mid-carrier

Fair Operating Practices/ Local Communities

FY2018 FY2019 FY2020 FY2021 FY2022
n/a

Governancewide)
CEO's Award (Group
Companies)
Number of award winners

BU Headʼs Award

NumberNissha Group

n/a

n/a

n/a

0

0

NumberNissha Group

n/a

n/a

n/a

10

0

NumberNissha Group

n/a

n/a

n/a

35*1

21

Synergy Award

NumberNissha Group

n/a

n/a

n/a

32

79

New Hope Award

NumberNissha Group

n/a

n/a

n/a

13

8

Nissha People Award

NumberNissha Group

220

111

111

n/a

n/a

37-7

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Items

Third Party
Verification

Environment

Unit

SocialBoundary

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

FY2018 FY2019 FY2020 FY2021 FY2022

Quality Management / Efficiency
and Productivity Improvement

Items
Smoking rate** In FY2021, the award system was revised and the Nissha People Award was abolished, while other awards were newly established.
*1. Includes the number of winners of the Director's Special Award, which corresponds to the BU Head's Award.
Subscription rate in employee stock ownership plan

GovernanceObesity rate%

Nissha Group in Japan

24.8

26.6

26.0

27.5

27.5

-

Nissha Group in Japan

0.84

0.49

0.98

1.48

0.35

-

*

Governance

GRI Standards Content
Index / ESG Data

Unit

Boundary%

Nissha Group in Japan

FY2018 FY2019 FY2020 FY2021 FY2022
30.7

29.3

27.8

28.5

25.6

%

Nissha Group in Japan

24.2

24.1

23.7

29.7

24.8

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

18. Safety and HealthFrequency of work-related accidents

Nissha Group in Japan

0.01

0.00

0.01

0.05

0.00

Fatal accidents（employee fatalities due to accidents at work)

Severity of work-related accidents

Number Nissha Group in Japan

0

0

0

0

0

Number of work-related accidents

NumberNissha Group

56

59

48

53

60

Number of work-related accidents (Japan)

Number

-

25

13

15

15

7

Number

-

6

2

3

7

0

Number

-

11

21

10

14

19

Number

-

5

11

2

2

2

Number

-

9

12

19

17

30

-

3

2

2

5

2

4 or more days of leave
Number of work-related accidents (North America)
Number of work-related accidents (Central and SouthAmerica)
Number of work-related accidents (Europe)
Number of work-related accidents (Asia)

Fair Operating Practices / Local Communities
Items

Unit

Boundary

FY2018 FY2019 FY2020 FY2021 FY2022

Number of CSR audits conducted for important or new
suppliers

NumberNissha Group in Japan

0

1

0

0

0

Number of CSR audits conducted for important or new
suppliers (cumulative)

NumberNissha Group in Japan

18

19

19

19

19

Total

NumberNissha Group in Japan

183

187

187

187

187

Related to labor andhuman rights

NumberNissha Group in Japan

84

88

88

88

88

Related to safety andhealthNumberNissha Group in Japan

53

53

53

53

53

21. Partnership with Our Suppliers

19. Health and Productivity Management
Regular health checkup rate%

Nissha Group in Japan

100

100

98.8

99.7

100

Detailed checkup rate after regular health checkup%

Nissha Group in Japan

42.6

37.8

34.7

51.7

60.3

Specific health checkup rate

%

100

100

99.8

99.7

100

Related to theenvironment

NumberNissha Group in Japan

29

29

29

29

29

Lung cancer screening rate%

Nissha Group in Japan

92.0

98.7

99.4

100

100

Related to ethics

NumberNissha Group in Japan

12

12

12

12

12

Stomach cancer screening rate%

Nissha Group in Japan

83.3

99.3

92.4

94.0

93.0

Management system

NumberNissha Group in Japan

5

5

5

5

5

Million yen Nissha Group in Japan

n/a

n/a

99

111

153

Colorectal cancer screening rate%

Nissha Group in Japan(40 years or older)

Nissha Group in Japan

87.9

95.6

96.8

96.8

96.2

47.9

49.4

60.3

66.7

66.7

%

(held on a biennial

61.5

57.3

81.1

74.2

74.7

22. Along with Local Communities
Social contribution expenses

Nissha Group in Japan
Uterus cancer screening rate

Number of findings pointed out at
CSR audit for suppliers (cumulative)

basis)
Nissha Group in Japan
Breast cancer screening rate%

(held on a biennial
basis)

Stress check implementation rate%

Nissha Group in Japan

100

100

100

100

99.9

Specific health guidance implementation rate%

Nissha Group in Japan

92.6

97.0

96.2

99.0

99.9

Nissha Sustainability Report 2023

37-8

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

SocialThird Party
Verification

Environment

Human
RightsHuman
Resources

Fair Operating Practices/ Local Communities

Quality Management /Efficiency and Productivity Improvement
Items

Unit

Boundary

FY2018FY2019FY2020

FY2021

FY2022

23. 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

Unit

Boundary FY2018

FY2019FY2020

FY2021

Total
compensation

FY2022

25. Corporate GovernanceDirectors of the Board

NumberNissha

9

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

1

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

12

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)

Unit

GRI Standards Content
Index / ESG Data

Governance

Boundary FY2018

FY2019FY2020

FY2021

FY2022

252

255

226

328

318

Nissha

28

28

26

28

32

Million yen

Nissha

48

50

46

53

54

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

Nissha

168

174

151

169

171

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

Million yen

Nissha

28

28

26

28

32

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Million yen

Nissha

48

50

46

53

54

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

Nissha

60

55

52

113

89

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

Million yen

Nissha

-

-

-

-

-

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

Million yen

Nissha

-

-

-

-

-

Directors of the Board (Excluding Independent
Outside Directors of the Board)

Million yen

NisshaMillion yen

Nissha

-

-

-

-

-

Million yen

Nissha

-

-

-

-

-

Directors of the Board (Excluding Independent
Outside Directors of the Board)

NumberNissha

6

5

5

7

5

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

NumberNissha

2

2

3

2

3

Independent Outside Directors of the Board
and Independent Audit and Supervisory Board
Members

NumberNissha

7

8

6

6

7

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 aggregationof compensationand etc.

Nissha Sustainability Report 2023

Quality Management / Efficiency
and Productivity Improvement

Items

Compensation
by category (Basesalary)Governance

Governance

23

25

22

45

57

37-9

Environment
Contents /Editorial Policy

Nissha Group
Sustainability

Environment

Items

Unit

Boundary

Nissha Group in
Japan

22

SocialThird Party
Verification

Human
RightsHuman
Resources

FY2017FY2018FY2019FY2020

FY2021

9

12

7

4

7

GovernanceFair Operating Practices/ Local Communities

Quality Management / Efficiency
and Productivity Improvement

Governance

GRI Standards Content
Index / ESG Data

List of policies, principles and guidelines

28. Risk Management and Compliance
Hotline number of reports* 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.
35. Management System and Other Certification Acquisitions

Title

Sustainability Report 2022・Web site

Pages on PDF

Enviroment Policy and Principles

4. Environmental Policy and Management Structures

4-1

Basic Policy on Labor and Human Rights

13. Human Rights

13-1

Human Resources Policy

14. Human Resources System

14-1

ISO9001 acquisition site

Number of sites

Nissha Group

24

24

29

25

19

Occupational Safety and Health Policy and Principles

18. Safety and Health

18-1

ISO13485 acquisition site

Number of sites

Nissha Group

8

10

10

10

12

Health and Productivity Management Policy

19. Health and Productivity Management

19-1

ISO22716 acquisition site

Number of sites

Nissha Group

0

0

1

1

1

Purchasing Principles

21. Partnership with Our Suppliers

21-1

ISO/TS16949・IATF16949 acquisition site

Number of sites

Nissha Group

6

8

9

10

8

Social Contribution Policy

22. Along with Local Communities

22-1

ISO14001 acquisition site

Number of sites

Nissha Group

12

13

17

17

18

Quality Policy / Nissha Quality Way

23. Quality Management

23-1

ISO50001 acquisition site

Number of sites

Nissha Group

2

2

5

4

4

Corporate Governance Policy

Website About > Corporate Governance-

OHSAS18001・ISO45001 acquisition site

Number of sites

Nissha Group

2

3

3

1

2

Risk Management Policy

28. Risk Management and Compliance28-1

Corporate Ethics and Compliance Guidelines and Principles

28. Risk Management and Compliance

28-2

ISO27001 acquisition site

Number of sites

Nissha Group

13

11

17

18

18

FSC COC acquisition site

Number of sites

Nissha Group

7

4

5

10

10

Information Security Policy and Principles

29. Information Security

29-1

PEFC acquisition site

Number of sites

Nissha Group2

2

Trade Management Policy and Principles

30. Trade Management

30-1

EN15593acquisition site

Number of sites

Nissha Group

0

1

1

1

1

Nissha Group Anti-Corruption Guidelines

31. Anti-corruption

31-1

EC93/42/EEC acquisition site

Number of sites

Nissha Group

2

2

2

2

3

Business Continuity Plans Plicy and Principles

32. Business Continuity

32-1

Tax Principles

33. Tax Principles

33

Basic Approach to Responsible Mineral Procurement

34. Responsible Mineral Procurement

34-1

Nissha Sustainability Report 2023

n/a

n/a

n/a

37-10