GREEN PROCUREMENTGUIDELINES

April 17, 2018

Daitron Co., Ltd.

Our Environmental Policy

Environmental Philosophy
Based on the recognition that creating a people‐friendly and earth‐friendly environment is one of our top
priority issues, we will contribute to global environment protection by reducing environmental burdens
through development, production, and sales of every product and related service.
Environmental Policy
Based on the above Environmental Philosophy, we will promote, and continuously improve environmental
management system activities in accordance with the Action Guidelines shown below to reduce
environmental impacts of our business operations ranging from design, manufacture, and sales of products torelated services and achieve harmony with the global environment.

Action Guidelines
1) Environmental friendliness and protection
To eliminate environmental pollutants and reduce environmental burdens, we will promote
environment‐friendly design, manufacture, and sales of products as well as green procurement.
For effective use of precious resources, we will promote energy saving and recycling, and reduce wastes.
2) Independent environmental activities
To promote environmental activities, we will establish, regularly review, and revise as necessary, ourown environmental objectives.
3) Compliance with environmental laws and regulations
In promoting environmental activities, we will comply with any applicable environmental laws andregulations and other requirements agreed on by the Company.
4) Promotion of educational activities
For improved environmental awareness and activities, we will take measures to make the Environmental
Policy well recognized by all employees including education and training.
5) Efforts at controlling chemical substances in products
We will promote establishment of a system for controlling chemical substances in products throughout
the supply chains.
6) Information Disclosure
The Environmental Policy will be open to the public.

Compliance and Corporate Ethics
We established the Compliance Committee to formulate basic compliance policies and manuals that provide
for the codes of ethics focusing on compliance with external relevant laws and regulations as well as internal
rules of the Company. With this system implemented we are strengthening internal governance andpromoting compliance activities for sound and smooth operation of the whole Group.

Risk Management
We regard risk management as a matter of extremely high priority in business administration and haveestablished the Risk Management Committee, which is designed to work together with the Compliance
Committee for the purpose of improved corporate value and reliability. Their mission is to prevent diverse
possible risks that could seriously affect our business administration, to quickly and properly cope with eachsituation so that it would not damage the stakeholders' interests, and consequently to conserve management
resources. Under this system administrators in charge of carrying out these activities are designated fromeach section, who are required to report promptly on the occurrence of any important issue concerning risk
management.
Timely Disclosure and Information Management
We have created the Information Disclosure Committee for securing timely and appropriate disclosure ofimportant corporate information while keeping it true, complete and accurate, which system has madepossible a fair and quick decision on when and what information should be disclosed. We also have set up theinformation security rules and personal information protection rules for thoroughgoing information
management.
Our Basic Attitude toward Internal Control System

The Company has established and is managing its internal control system for the purpose of sounder andmore effective business management under the Basic Policy on Corporate Governance recognizing thefollowing issues as first priorities:
1) Forming of an organization/corporate culture helpful to prevent scandals and comply with laws andregulations as well as maintenance of its effectiveness.
2) Implementation of a system to identify and assess reasonably and manage properly foreseeable risks inbusiness management.
3) Forming of an organization/corporate culture helpful to secure reliability of financial reporting anddisclosed information and maintain the effectiveness thereof.

1. Objective
We work on green procurement actively as part of its promotion of global environment protection activities.
Through these efforts of promoting green procurement and offering customers environmentally‐friendly
products and goods, we are aiming to contribute to global environment protection based on a recycling
society.

2. Scope
This guideline applies to products purchased by us for selling products to customers.
Purchase of Goods
We will procure products for sale, components, packing materials and paper tubes to be used fortransportation and protection, preferentially from suppliers working on environmentally‐friendly
activities including ISO14001 third‐party certification.

3. Green Procurement Standards

3‐1 Request for Establishment of Environment Management System (EMS)
Suppliers will be requested to establish an EMS, preferably, a system certified by a third‐party
organization such as ISO14001, in principle.
Suppliers that have not established any will be requested to establish your own EMS.

1. Third‐party certified EMS such as ISO14001 or ISO14005 compliant or others.
(Including Eco Action 21, Eco Stage and KES, which is Japanese major EMS?)
2. Supplier’s own EMS.
3‐2 Request for Establishment of Management System for Chemical Substances Contained in Products
Suppliers will be required to establish a management system for chemical substances contained in
products ("CMS").
If you already have a management system such as ISO 9001 and/or ISO 14001 or similar, you may
capitalize on it to establish a management system for chemical substances contained in products, at thediscretion of the relevant controlling organization. A new management system may be established, but it
is recommended that an existing one, if any, be used.
Below are parts of the requirements for establishing a CMS, for your reference.
The requirements may be changed as necessary. Please make necessary changes and renewals according
to the industrial requirements.
Table 3 Examples of Requirements in CMS
1PolicyClarifying CMS policies by corporate or business representative

2

Definition of Management Criteria.

3

Definition of Scope of Management.

Clarifying management procedures and criteria for requirementsfrom laws, industry standards or customers.
Clarifying products, processes, constructional elements and chemical
substances to be managed.

4

Establishment of Objectives & Planning for Setting objectives and reviewing implemented process.
Implemented Process

5

Definition of Organizational System,
Responsibilities and Authority

Clarifying responsibilities and roles in each division related to the
management.

6

Design and Development

Taking into account compliance with the defined requirements at
design and development stage.

7
8

Acquisition and Verification of Information Constructing information acquisition scheme and acquiringof Chemical Substances in Products
information of chemical substance contained in delivered items.
Purchase Management
Conveying requirements to suppliers.

9

Acceptance Verification

Implementing conformity check of delivered items with one’s defined
criteria when receiving delivered items

10

Process Management

11

Shipping Verification

Clarifying processes in which composition of Chemical_ substances
vary and controlling properly. Also implementing distinction control
and prevention of contamination.
Implementing conformity check of shipping products With one’s
defined criteria or standards.

12
13

Traceability
Change Control

14

Non‐conformity Response

Constructing traceability scheme of products and Delivered items.
Clarifying procedures in case that composition of chemical
substances is likely to be influenced, such as changes of design,lClarifying procedures
when unconformable products come out
When nonconformity occurs, please indicate that you will promptly contact
our company.

15
16

Training
Management of Documentation andRecords

Clarifying education contents
Implementing documentation of management procedures or
instructions, and controlling appropriately.

17
18

Communication (Provision of Information) Constructing information sharing system.
Performance(State of Implementation)
Evaluating CMS implementation status, and improving performance.
Evaluation and Improvement

19

Management Review (Correction by
Management)

Reviewing and correcting problems by top management

Reference Example 2.
Management items in CMS by JAMP (Joint Article Management Promotion‐consortium)
recommended.
Representation of the management policy of chemical substances in products.
Top managers of the management of chemical substances in products shall determine themanagement policy of chemical substances in products for the organization and shall address
implementation of the effectual management of chemical substances in products.
1. Defining the management criteria of chemical substances in products
The organization shall determine and document the management criteria of chemical substances in
products.
2. Target and implementation plan
The organization shall set the target for management of chemical substances in products. The
organization shall draw up, implement and sustain the implementation plan to achieve the target.
The organization shall review the target and the implementation plan whenever needed.
3. Defining responsibility and authority
The organization shall determine responsibilities and authorities to implement management ofchemical substances in products effectively.
4. Management of chemical substances at design and development.
For the purpose of producing products which can fulfill the management criteria of chemical
substances in products in the stage of design and development, the organization shall define clearlyand document the management criteria of chemical substances in products at the respective stage ofpurchasing, manufacturing and delivery in accordance with products and the type of business
operation.
5. Collection and verification of information of chemical substances in products
The organization shall present the management criteria of chemical substances in products forpurchasing (hereinafter referred to as “the purchase management criteria”) to suppliers, and collectnecessary information of chemical substances in products. The organization shall verify if informationof chemical substances in the purchased products satisfies the purchase management criteria andrecord the result accordingly.
The organization shall complete collection and verification of the information of chemical substancesin products in accordance with the purchase management criteria before start of manufacturing.
6. Verification of the management status of chemical substances in products at suppliers
When the organization selects the supplier, the organization shall verify and record the management
status of chemical substances in products at the supplier. In case that the organization continues
business with the supplier, for the purpose of fulfilling the management criteria of chemical
substances in products, the organization shall verify and record the supplier’s management statusof chemical substances in products again whenever necessary. The organization shall define theactions against the outcome of the supplier’s management status prior to verification.
7. Management of chemical substances in products at receiving
The organization shall verify purchased products upon receiving if they fulfil the purchase
management criteria of the organization and record accordingly.
8. Management of chemical substances in products for the manufacturing process in general
The organization shall manage the manufacturing processes in accordance with the management
criteria of chemical substances in products for manufacturing processes and record the result
accordingly.
9. Prevention of contamination by incorrect use or admixture

The organization shall implement the preventive measures against contamination by incorrect use or
admixture of declarable chemical substances under the management criteria of chemical substancesin products.
10. Management at delivery
Before the organization delivers products, the organization shall verify products if they satisfy the
management criteria of chemical substances in products for delivery and record the result
accordingly. At receiving or at the manufacturing process, the organization shall verify again toensure that all predetermined check items are completely confirmed. The organization shall also
manage to prevent contamination by any incorrect shipment or mixed‐up in the product warehouse.
11. Verification of the management status of chemical substances in products at outsourcing
In case that the organization outsources some processes such as product design and development or
manufacturing to another organization, the organization shall verify the management status ofchemical substances in products at the outsourcing organization to ensure that the management
criteria of chemical substances in products can be complied and shall record the result accordingly.
12. Traceability
The organization shall assure traceability of the information of chemical substances in products byappropriate manners in order to grasp, utilize, disclose and transfer the information of chemical
substances in products swiftly.
13. Exchange of information with the customer
The organization shall clearly define and implement the effective method of exchanging information
with the customer for the following matters, and record details of such information exchange.
14. Change management
The organization shall extract changeable elements which may affect declarable chemical substances
under the management criteria of chemical substances in products. When any change arises, before
the actual change is taken place, the organization shall effectually confirm a change to be made to
the information of chemical substances in products and verify if the management criteria of chemical
substances in products can still be fulfilled. The organization shall document the procedures ofchange management and record the result of change.
15. Response to occurrence of nonconformity
The organization shall develop and document the method of in‐house contacts, the method ofcontacting suppliers, outsourcing organizations and customers as well as the temporary corrective
actions, in order to correspond to any nonconformity arising relating to chemical substances in
products. After the temporary measure is taken, the organization shall investigate and identify thecause, determine and implement the necessary countermeasures to prevent recurrence ofnonconformity. The organization shall take the preventive measures to avoid any occurrence ofnonconformity. The organization shall record the responses taken at nonconformity.
16. Education and training
The organization shall develop the contents of each management and operation module that arenecessary to train and educate for management of chemical substances in products. The organization
shall identify works and personnel to be engaged in management of chemical substances in products,
and conduct the necessary training and education, and record accordingly.
17. Management of document and record
The organization shall manage the documents including “the procedures of documentation” and therecords as required in the action items of the Guidelines as well as the procedures and the records
which are determined by the organization as necessary.
18. Evaluation and improvement of implementation status
The organization shall evaluate the management status of chemical substances in products
periodically at a predetermined frequency. The organization shall implement corrective actions tomatters which require correction. The organization shall record the result of evaluation and thecorrective actions and report it to top managers of the management of chemical substances in
products. The top management in chemical substances in products shall review the result of
evaluation and the corrective actions.

3-3 Environment Management Substances
Our supplies will be requested to conform to our customers' control standards for the products, goods,
and packing materials sold by us.
The relevant control standards will be sent to you as soon as we obtain them.
Please contact our representative if they are not sent.
(1) Substances designated as to be controlled or restricted by customers of Daitron Co., Ltd.
(2) Chemical substances prohibited by relevant foreign or domestic laws and regulations including the
REACH, the RoHS Directive, the Act on the Evaluation of Chemical Substances and Regulation of
Their Manufacture, etc., the Labor and Sanitation Act, and the Poisonous Material Control Act.
(3) Please use packing materials that you have confirmed do not contain any prohibited substances.

4. Requests for Environmental protection
4-1 Request for Cooperation in and Evaluation of Suppliers’ Environment Management System
In selecting new and existing suppliers, we will evaluate suppliers’ efforts in environmental protection
and green procurement activities, and compliance status with environmental laws and regulations, inaddition to their quality, price, delivery, and services.
1. Purpose
Based on the confirmation result of the presence or absence of a manufacturer's system forcontrolling information on chemical substances contained in products procured by Daitron Co.,
Ltd. as well as the appropriateness of their source (secondary and tertiary supply chains) control,
suppliers may be requested to make necessary corrections.
2. Subject
Existing and new suppliers from whom Daitron Co., Ltd. procure products.
3. Implementation of Investigation
Suppliers will be requested to answer internal audit sheets designated by customers or anindustry‐standard internal audit sheet sent to you. In case the confirmation by an audit sheet isjudged insufficient and where necessary, suppliers may be visited by us for further confirmation.
4. Evaluation of Investigation Result
In case the evaluation result in the evaluation sheet does not meet the standards, such suppliers
will be requested for improvement.
In case there is any finding in the answers in the evaluation sheet which may cause material
trouble, our relevant departments may discuss whether our direction will work, and whether tocontinue or discontinue business.
Table 4 Evaluation Standards in Internal Audit Sheet
Above standard

Continue or start business

Below standard

1. Confirm the result of correction directions and examine the possibility of continuingbusiness.
2. In case there is a possibility of a flow of nonconforming products or a material flow,
our relevant departments will discuss the possibility of discontinuing business.

4-2 Request for Change Control Report
1. In case of any change in 4M (Man, Machine, Material, and Method) in the process of manufacturing
products procured by us, Suppliers will be requested to send us the description of such change by six (6)months prior, in principle.
2. If you have your own form for notification of such changes, please use such form. If not, please notify usof the following items:(1) In case of catalogue product:
Information on production stoppage ‐ model, timing, existence or non‐existence of replacement
Information on change ‐ model, timing, part to be changed, shape, price/delivery, change incontained ingredients.
(2) In case of contract manufacture:Items to be changed may have special control requirements of customers. If control items areunclear, please contact our representative.
(3) Evaluation of Risks Associated with Change
Suppliers will be requested to define the change‐points in the process to be brought about bysuch change, and assess the effects of such changes on the product quality and the environment.
(4) Confirmation of customer's approval
After making the application, suppliers will be requested to implement the change after
obtaining the relevant customer’s approval.
(5) Suppliers may be requested to cooperate in applying for a change using an application form
designated by the customer.
4-3 Request for Traceability Control
1. Control of manufacture records for shipped products
Suppliers will be requested to control the manufacture records for shipped products so that the process
history (manufacture number, manufacture date, delivery date, manufacture site, workers, chemical
ingredients contained in the delivered components, lot number, etc.) will be identified from the ordernumber.
2. Retention of records
Suppliers will be requested to retain and control the shipping and manufacture records for at least ten
years to allow retrospective reports.
4-4 Request for Establishment of Business Continuity Plan System (BCP)
Suppliers will be requested to establish a business continuity plan (BCP *1) as a risk management system
so that business will be continued in an unexpected emergency.
*1: "BCP" means a system prepared strategically at normal times not to discontinue principal
operations in an unexpected emergency, and in the event that operations should be
discontinued, recover important functions within the target recovery time and minimize therisks associated with discontinuing operations.
4-5 Requests for Response to On-site Inspection
Suppliers may be requested to cooperate in on‐site inspections at the manufacture site for the relevant
products at a customer's or our request.

5. Request to Obtain Most Recent Version and Update Guidelines
Suppliers will be requested to update these Green Procurement Guidelines.
The most recent version is available at: http://www.daitron.co.jp/csr/index.html

Revision Record
May 1, 2006
Edition 1
March 1, 2010
Edition 2
Edition 2.1
Edition 2.2
Edition 2.3
February 1, 2014 Edition 3

Created. RoHS
Changed specified chemical substances （REACH）
Change of contact
Change of contact
Change of contact
Change of our CSR policy.

April 3, 2017

Edition 3.2

Daito Electron Becomes Daitron.

May 1, 2017

Edition 3.3

Change of our CSR policy.

April 17,2018

Edition 3.4

Change of Item Number3-2

Daitron Co., Ltd
Purchasing Sec., Tokyo Center
3-15-1, Fujimidai, Kunitachi-City, Tokyo
Purchasing Sec., Osaka Center
6-11, Miyahara 4-chome, Yodogawa-Ku, Osaka
Quality Environment Promotion Offic
6-11, Miyahara 4-chome, Yodogawa-Ku, Osaka
E-mail kankyou@daitron.co.jp