MATERIALITY（KEY CORPORATE SUSTAINABILITY ISSUES）OF NORITSU KOKI GROUP

MATERIALITY
FRAMEWORK

In moving towards the realisation of a sustainable society,
the Noritsu Koki Group has identified 4 corporate materialities.

MATERIALITY
ACTION PLAN

We have set targets and developed a Materiality Action Plan
for achieving our identified material issues.

Materiality		Relevant to	Our actions	Goals for FY2023	Achievements in FY2023	Plans for FY2024
Contribution to society and community through business operations	01 Shaping the future and making a positive contribution to creating a prosperous society and enriching people`s lives by manufacturing products that society needs	TB･AT･JL	Promoting and enhancing quality management	Monitor Group response to customers regarding quality issues	Monitored Group response to customers regarding quality issues	・Monitor how clients inquiries are responded ・Conduct quality audits
		TB･AT･JL	Investing in R&D to create new technologies and value	R&D investment of ¥4.0 billion	Invested ¥3.9 billion in R&D	・R&D investment of \4.1 billion ・Consider setting KPIs
		NK・TB・AT・JL	Supporting local communities and culture development closely linked to our businesses	－	Supported local communities and cultural development activities closely linked to our businesses	Carry out plans of supporting local communities and culture development at each company
	02 Enhancing our supply chain framework to make it more environmentally and socially responsible	TB･AT･JL	Delivering environmentally responsible products	Make efforts to be environmentally conscious throughout the entire lifecycle of products	Made efforts to be environmentally conscious throughout the entire lifecycle of products	・Develop environmentally responsible products considering entire product lifecycles ・Consider setting KPIs (including measuring the amount of plastics used for products)
		NK･TB･AT･JL	Reducing greenhouse gas emissions (Scope 1,2,3)	Implement a greenhouse gas emissions reduction plan	Implemented a greenhouse gas emissions reduction plan	・Calculate Scope3 emissions and consider setting target ・Revise 2030 target (Scope 1,2) ・Reconsider Scope 1,2 reduction plan and execute the plan ・Review TCFD scenario
		TB･AT･JL	Establishing our supply chain management framework and promoting risk mitigation	To inform all our key suppliers about our Procurement Policy	・Informed all our key suppliers about our Procurement Policy ・Carried out human rights risk assessment (tier1 suppliers and end-users)	・Set the Procurement Guideline (making the Procurement Policy in detail) ・Establish a system to confirm supplier compliance of the Procurement Policy and Guideline ・Carry out the human rights due diligence ・Confirm the procurement of conflict minerals and set policy

Establishing a robust corporate foundation	03 Creating inclusive workplaces where diversity is respected and all employees can thrive and contribute with a future-oriented mindset	NK･TB･AT･JL	Securing health and safety at work places	Monitor the promotion of health and productivity management and address issues base on the results	Monitored the promotion of health and productivity management and identified issues to be addressed	・Monitor occupational safety & health (TB) ・Monitor health management KPIs suitable for each company ・Address issues identified through the monitoring
		NK･TB･AT･JL	Improving initiatives for developing talent, skills, a proactive mindset and leadership of employees at all levels	Provide an average of 22.4 hours of training per employee per year	Provided an average of 18hours of training per employee per year (80% achievement to the plan)	・Provide an average of 22.3 hours of training per employee per year ・Develop training programs
		NK･TB･AT･JL	Respecting diversity and promoting more flexible ways of working	・Monitor the promotion of diverse and flexible ways of working and address issues based on the results ・Provide human rights training more than once a year	・All companies completed the human rights training (100% coverage*1) ・Revised Human Rights Policy ・Carried out human rights risk assessment (Group companies) ・Monitored the promotion of diverse and flexible ways of working and identified issues based	・Provide human rights training more than once a year to employees at all levels ・Monitor KPIs for evaluating flexible working ways suitable for each company ・Address issues identified through the monitoring
	04 Enhancing our sound corporate governance framework to achieve sustainable growth	NK	Enhancing Board effectiveness Promoting stakeholder engagements	Address issues based on the FY2022 assessment results and continue to assess Board effectiveness	Addressed issues based on the FY2022 results and continued an assessment of Board effectiveness	・Continue assessing Board effectiveness and addressing issues ・Expand engagement opportunities with shareholders and investors ・Improve information disclosures
		NK･TB･AT･JL	Enhancing risk management framework and promoting risk mitigation	Integrated in #12 due to Materiality Action Plan revision	Carried out a risk assessment at each Group company	・Carry out risk assessments, examine and promote measures to address issues ・Review and enhance BCP
		NK･TB･AT･JL	Fostering ethical corporate culture based on the Code of Conduct Responding to ESG-related laws and regulations	Provide information security training once a year more	Carried out information security training (100% coverage1) Carried out compliance training (100% coverage1)	・Set and review related policies ・Provide related trainings once a year or more to employees at all levels (compliance training, information security training) ・Monitor and respond to ESG-related laws and regulations ・Manage whistle blowing system (hotline)

*1 All executives and employees at NKC, Teibow, AlphaTheta including part-time, temporary staffs and contractors (only permanent employees at soliton, Taibo and JLab, excludes long-term absentees at Teibow)

*Company names indicated above are those as of March 2024.
*Full names of the abbreviated company names are shown below.
NK：Noritsu Koki Co., Ltd.
TB：Teibow Co.,Ltd.
AT：AlphaTheta Corporation
JL：PEAG, LLC dba JLab

MATERIALITY ASSESSMENT PROCESS

We have identified our materialities by conducting our materiality assessment based on the
following processes with cross group co-operation and the help of external advisory experts.

STEP1

Identify potential
social issues
and impacts

Working to incorporate diverse stakeholder expectations, we used 11 different globally-recognised sustainability standards such as ESG disclosure guidelines, evaluation criteria provided by ESG evaluation agencies, and codes of conduct. We performed an analysis on sector-specific material issues and identified 31 potential social issues that impact our business in order to define our materiality.

*1 GRI Standards, SASB Standards
*2 DJSI (RobecoSAM), FTSE, MSCI
*3 SDGs, ISO26000, Ten Principles of the UNGC, OECD Guidelines for Multinational Enterprises
*4 World Economic Forum（WEF）“Measuring Stakeholder Capitalism”, “Resolving Societal Issues Through Innovation — Listings of Societal Issues” FOR CO-CREATING THE FUTURE

STEP2

Assess and
prioritise material
topics

The 31 social issues selected in Step 1 were evaluated and weighted using a scoring method, incorporating the views of stakeholders and Group businesses, and prioritised according to the following criteria.

1) Stakeholder Input: assessment based on the relative interests and importance of stakeholders by external advisory experts and scholars.
2) Business Impact and Values: reassessing the evaluation scores provided by our 4 major group businesses based on the business impact and values of the Noritsu Koki Group.

As a result, we identified 15 social issues that matter the most to our business and stakeholders.

STEP3

Define materiality

The 15 potential social topics selected in Step 2 were clustered into groups on the basis of our MVV and business model. We refined a list of core corporate material issues that could highly affect our business.
Having had insightful feedback from external advisory experts and far-reaching discussions with senior management including our CEO, we integrated them into 4 significant material topics that need to be addressed and worked on as a group.

STEP4

Determine and
disclose the
materiality

We designed a materiality matrix and validated the credibility of the identified 4 material issues. Approved by the Board of Directors, we finally defined them as the Noritsu Koki Group’s materialities.

MATERIALITY FRAMEWORK

MATERIALITY MATRIX

We designed the materiality matrix using “Priority for stakeholders” and “Priority for business”.
We selected topics with high scores (i.e. indicating the level of priority) for the social issues that our Group needs to address.

CORPORATE PHILOSOPHY

SUSTAINABILITY PROMOTION FRAMEWORK

SUSTAINABILITY POLICIES