Adherence to the Nihon Kohden Sustainable Procurement Standards

We maintain mutual communication with our business partners and ask for their understanding and compliance with the Nihon Kohden Sustainable Procurement Standards. We also request their cooperation in conducting self-assessments regarding their initiatives related to the environment, quality, and other aspects of sustainability.
In recent years, social demand for sustainability initiatives in collaboration with the supply chain has been increasing, and it has become even more important to strengthen partnerships with our business partners. We will continue working together to reduce environmental impact and fulfill our social responsibility.

Nihon Kohden administers a questionnaire to promote sustainability in cooperation with our business partners. In FY2024, we conducted a Supplier Questionnaire (60 questions across five categories: Environment, Human Rights, Quality Control, Occupational Health and Safety) with an expanded scope, replacing the Sustainability Questionnaire (22 questions across six categories: Compliance and Fair Business Practices, Human Rights, Quality, Environment, Information Management) that had been administered annually until the previous fiscal year. We conducted the survey with all 465 domestic and international suppliers, and received responses from 316 companies (response rate: 68.0%). Through this questionnaire, we confirmed their understanding and compliance with the Nihon Kohden Sustainable Procurement Standards, as well as the presence, nature, and countermeasures of any incidents at each supplier. Through ongoing dialogue, we aim to discuss appropriate countermeasures, mitigate risks, and build strong, trusting relationships with our business partners.
The results, including each partner’s initiatives and feedback, are shared internally and utilized to promote fair and responsible procurement. Based on the questionnaire responses in FY2024, we confirmed the following status of initiatives. 

We shared a feedback sheet with suppliers who participated in the survey, enabling them to utilize the results in their future initiatives.
We will continue to strengthen collaboration with our suppliers to advance our sustainability efforts.

Nihon Kohden continuously provides education and support to suppliers to promote understanding of sustainability and strengthen anti-corruption measures. To enhance supplier relationships and risk management, we conduct the Supplier Questionnaire and provide all suppliers with feedback on the analysis results. This includes radar charts comparing each supplier’s performance and capabilities with the supplier average across the categories of Sustainability Promotion, Environment, Human Rights, Quality, Occupational Health and Safety, and Governance (including Compliance and Information Security).
In addition, for suppliers who reported potential risks of serious incidents or accidents in the areas of Environment, Human Rights, Quality Control, or Governance, we promptly verified the facts and held discussions to ensure appropriate corrective and improvement measures were taken. For suppliers assessed as having low scores and high risks, we conducted ongoing follow-up investigations and interviews to better understand the situation and worked closely with them to promote sustainability.

Nihon Kohden provides regular compliance training to all employees to ensure they maintain a correct understanding and awareness of sound and fair business practices. Procurement-related departments conduct annual training on relevant laws and regulations, such as the Fair Competition Code and the Subcontract Act. In FY2024, 60 employees participated in these sessions.

To respond to customer needs, we strive to maintain and improve the quality of the components and materials we procure. We have new business partners cooperate with audits to confirm the appropriate operation of quality management systems, and have existing business partners cooperate with periodic reviews of operations and quality audits based on the quality of delivered components. We strive to further enhance quality by getting business partners themselves to understand that the quality of delivered components can have a significant impact on the quality of our end products.

Mining and trading of some minerals in the Democratic Republic of Congo (DRC) and neighboring countries are said to be a source of funding for armed groups that are causing human rights abuses and conflicts in the region. Under these circumstances, the Dodd-Frank Act was enacted in the U.S. in July 2010. This law requires companies listed in the U.S. to report to the Securities and Exchange Commission (SEC) on their use of conflict minerals. In the EU, the Conflict Minerals Regulation was passed in January 2021, requiring companies importing ores and unprocessed metals to identify the OECD Annex II risks in the Conflict Affected and High-Risk Areas (CHARAs), and to report annually on these areas.

In response to this situation, Nihon Kohden has actively cooperated with surveys conducted by our customers on the use of conflict minerals in our products. The survey is conducted using CMRT and EMRT forms to determine whether 3TG (tin, tantalum, tungsten and gold), cobalt, and mica are contained in the components purchased from suppliers. In addition, if a smelter is not certified under the Responsible Minerals Assurance Process (RMAP) conducted by the Responsible Minerals Initiative (RMI), or if conflict minerals linked to issues such as human rights violations or funding sources for armed groups are found to be used in our products, we will take steps to ensure that they are not used.

We have not identified the use of conflict minerals linked to issues such as human rights violations in any of our products we have investigated so far. In the event that our future investigations reveal the use of conflict minerals in our products, we will take steps to eliminate the use of conflict minerals in accordance with the Nihon Kohden Sustainable Procurement Standards and Responsible Mineral Procurement Policy.