Relationships with Business Partners

In April 2021, we formulated a Procurement Policy corresponding to each SDGs. Based on the perspectives of "Fairness/impartiality," "Compliance with Laws and Regulations," "Green Procurement," and "Coexistence and Co-prosperity," purchasing departments at our head office play a central role in building a relationship of trust with business partners and we are conducting purchasing activities. Based on the "NTN Group Green Procurement Standards," we are promoting green procurement, which prioritizes environmental preservation efforts and procurement from business partners with superior environmental quality. We have also established "NTN CSR Procurement Guidelines" and are requesting active promotion of CSR activities. We are also working to achieve local procurement at all of our manufacturing sites, including those outside Japan, and to procure materials from optimal locations globally.
In May 2022, we announced our "Declaration of Partnerships Building" with the aim of building new partnerships by promoting collaboration, coexistence and co-prosperity with business partners in the supply chain and businesses seeking to create value.

We conduct annual survey of business partners to further raise awareness of "NTN CSR Procurement Guidelines" and to confirm compliance.
By the fiscal year 2021 questionnaire, the achievement ratio of human rights and labor, and quality and safety was more than 90%, indicating that business partners were also highly conscious. However, the ratio of business continuity management (BCM), social contribution, and CSR procurement was less than 80%, and it meant that their awareness was not high at this stage.
In recent years, companies have been required to not only achieve corporate performance (economic value), but also to be an entity that is needed by society (social value). To help business partners understand that social value is important, we will continue to engage in awareness-raising activities.

■CSR questionnaire for suppliers

We conduct self-audits of subcontract transactions with the aim of optimizing subcontract transactions. In order to voluntarily audit the status of compliance with the Subcontracting Act, each business site in Japan has been responsible for implementing a certification system for "subcontract transaction self-auditors" since 2017. In 2021, we held an e-learning course, the same as in the previous year, 29 employees renewed their term and 24 employees were newly certified, bringing the total number of self-auditors to 109.
In the fiscal year ended March 31, 2022, self-audits were conducted at our 23 business sites in Japan, with the self-auditors playing a leading role in such audits and supervising department staff joined the audits as much as possible either on-site or on-line to point problems out and give instructions accordingly. At the same time, we operate e-learning courses for self-development in order to widely disseminate the contents of the Subcontracting Act within the company.
We will continue to conduct activities aimed at understanding and complying with the Subcontracting Act and at ensuring proper subcontracting practices.

From the viewpoint of risk management, we begin transactions with our business partners after checking their management structure, quality, and environmental management.
We also conduct annual survey for business partners, which we have already conducted transactions with, to continuously monitor their business conditions. If we determine that a transaction involves a high risk, we strive to minimize our procurement risk and ensure stable procurement by implementing risk reduction measures commensurate with the magnitude of the impact, taking into consideration procurement parts, transaction amounts, etc.
With regard to a natural disaster or an infectious disease, we have established a risk management database, and in the event of an emergency, we immediately confirm the safety of business partners and manage the risk associated with ensuring a stable supply of our products throughout the supply chain.

We are promoting supply chain BCP activities involving logistics companies and business partners in order to ensure stable procurement.
We are strengthening crisis-management in preparation for natural disasters such as earthquakes and typhoons at our business partners and logistics sites. In addition, in the event of a widespread crisis such as a pandemic, we will cooperate with our business partners to ensure business continuity, and promote infrastructure development such as on-line business operations with our business partners, and sharing of safety information and the code of conduct. In addition, we regularly send survey tables to important suppliers to grasp their management, supply chains, and other issues, and respond individually if we deem a follow-up necessary.

NTN CSR Procurement Guidelines

As a social demand, companies are required to engage in environmental activities such as reducing CO₂ emissions generated during production and transportation, preserving biodiversity, protecting resources, reducing environmental burdens, and complying with domestic and international laws and regulations, as well as activities such as respecting human rights, developing human resources, and contributing to local communities.
The NTN Group has established a "Corporate Philosophy" to "We shall contribute to international society through creating new technologies and developing new products", and in order to realize this philosophy, we have established a "CSR Policy" and are implementing CSR activities.
In our supply chain management, we promote "CSR procurement" and "green procurement," giving priority to suppliers who are proactive in their CSR (corporate social responsibility) initiatives, based on our "Procurement Policy" formulated from the perspective of "fairness and impartiality," "compliance with laws and regulations," "green procurement," and "coexistence and co-prosperity."
We would like to ask our suppliers to further promote their CSR activities by referring to these guidelines.

NTN Group Green Procurement Standards

Pursuing harmony with the global environment as a mission of greatest importance, we, at the NTN Group, persevere in our efforts aiming at earth-friendly business activities.

Although NTN products including bearings and constant-velocity joints have been originally positioned as "environmentally-friendly (eco-friendly)" goods, which may reduce energy loss due to friction, we, not satisfied with status quo, still earnestly work on the research and development for further enhancement of our products to make a more enormous contribution to a worldwide growing tendency toward energy saving.

Furthermore, we continuously improve the environmental management system in accordance with ISO 14001 to reduce environmental loading, and also ask our suppliers to promote business management taking environmental preservation into consideration, as well as to obtain a certificate of compliance with ISO 14001, Eco Stage, or the like from an accredited third party. We help our suppliers obtain the certification of Eco Stage through NTN Technical Service, one of our subsidiary companies, if they desire to do so.

Against this background, as management of environmentally hazardous substances has become increasingly important, as part of global environmental loading reduction, we are proactively advancing with firm steps toward the accomplishment of the first-and-foremost subjects for our green procurement activities: 1) reduction of environmentally hazardous substances contained in NTN products; 2) reduction of environmentally hazardous substances used in the manufacturing process; 3) introduction of the production facilities or technologies capable of reducing environmentally hazardous substances. In recent years, regulations on environmentally hazardous substances, which began in EU, have become global standards, and an increasing number of countries has enforced similar laws and regulations, while requests from customers have also become more complicated, and thus not only we at NTN but also our suppliers are required to strictly manage environmentally hazardous substances throughout a supply chain.

We hope that you, our suppliers, sufficiently understand the importance of these activities and recognize the observance of the provisions of the Standards is a prerequisite for doing business with you and that you aggressively cooperate with our green procurement program.