Philosophy and Basic Policy

The Nippon Paper Group Environmental Charter

Philosophy

The Nippon Paper Group is committed to helping preserve the global environment over the long term and contributing to the development of a recycling based society by carrying out its corporate activities in recognition of the importance of biodiversity.

Basic Policy

  1. 1.Act to counter global warming
  2. 2.Protect and develop forest resources
  3. 3.Increase use of recycled resources
  4. 4.Comply with environmental statutes and work to minimize our environmental impact
  5. 5. Develop environmentally friendly technologies and products
  6. 6.Engage in active environmental communication

(Established on March 30, 2001, and revised on March 30, 2007)

The Nippon Paper Group
"Principles and Basic Policies Concerning Raw Materials Procurement"

Since the establishment of the "Philosophy and Basic Policy Concerning Raw Materials Procurement" on October 5, 2005, the Nippon Paper Group (the "Group") has been developing a raw materials procurement system that can be deemed credible by a wide range of stakeholders. The Group has been striving to implement this through managing its global supply chain in a way to address relevant environmental and social challenges. To achieve its mission, which is "to contribute to better living and cultural progress everywhere it does business," the Group has revised the Group's procurement policy to the "Principles and Basic Policies Concerning Raw Materials Procurement" (the "Policies"). The revision is intended to enable the Group to address issues such as human rights and climate change more effectively. At the same time, the Group has recently established the "Wood Resources Procurement Guidelines" (the "Guidelines") for forest resources, which are the core resources of the Group's business operations.

The Policies and the Guidelines were prepared by studying relevant guidelines such as the "OECD Due Diligence Guidance for Responsible Business Conduct" and other guidelines, and based on advice from external experts. Moreover, both the Policies and the Guidelines conform to the "Nippon Paper Group Human Rights Policy", which has been developed according to international standards relating to human rights. The "Nippon Paper Group Human Rights Policy" is based on the "Guiding Principles on Business and Human Rights" developed by the United Nations, and also aligns with the "International Bill of Human Rights" and the "ILO Declaration on Fundamental Principles and Rights at Work".

The Policies and the Guidelines are communicated to all stakeholders by publishing them on the Group's website in both Japanese and English. The Group also works to build a sustainable supply chain in cooperation with suppliers through risk minimization and improvement processes in accordance with the Policies and the Guidelines.

■ Governance
The Policies and Guidelines are reviewed once a year by the Nippon Paper Group Raw Materials Committee under the supervision of the Board of Directors of Nippon Paper Industries Co., Ltd., based on changing social situations and business trends.

■ Scope of Application
The Policies and Guidelines cover all raw materials and fuels procured by Nippon Paper Industries Co., Ltd., and its consolidated subsidiaries, for the manufacture of products.

Principles

We shall strive to contribute to better living and cultural progress everywhere it does business through implementing sustainable procurement practices for raw materials in collaboration with our suppliers. To do this, we shall make our best effort to identify social and environmental issues relating to our procurement practices and to address the challenges identified.

Basic Policies

1. Legal compliance and fair and equitable transactions

  1. (1) We respect international standards and comply with relevant laws and regulations.
  2. (2) We conduct fair business transactions and provide equitable opportunities for competition.
  3. (3) We adequately manage information obtained through our procurement activities.

2. Addressing social issues

  1. (1) We ensure prevention of human rights violations and workers' rights violations by facilitating the efforts to respect human rights issues* within our supply chains.
    * Anti-discrimination or harassment, anti-forced labor or child labor, respect for workers' rights (the right to organize, bargain and act collectively), prevention of low-wage labor and excessive working time, ensuring occupational safety and health, etc.
  2. (2) We promote our initiatives to respect the rights of local communities* in the regions where we procure raw materials. By doing so, we aim to harmoniously coexist with local communities and to contribute to the community development.
    * Ensuring provision of sufficient information in advance and seeking the understanding of local communities in utilizing land and resources in the relevant area, respect for the rights and culture of indigenous peoples, provision of support and employment opportunities to local residents, etc.
  3. (3) We carry out confirmation to ensure that we do not procure illegally harvested wood, conflict minerals and other resources that may involve human rights violations.
    Note: This Paragraph 2 of the Policies aligns with the "Nippon Paper Group Human Rights Policy".

3. Addressing environmental issues

  1. (1) We use forest and water resources sustainably for the conservation of such resources.
  2. (2) We minimize our negative impact on biodiversity and take measures for its conservation.
  3. (3) We carry out procurement in a manner that contributes to energy saving and reduction of greenhouse gas emissions as part of our response to climate change.
  4. (4) We seek to make effective use of resources and to reduce waste by promoting the use of recycled materials, such as used paper, to contribute to building a society based on a circular economy.
  5. (5) We work to mitigate any potential environmental impact by procuring raw materials with chemical substances that have been properly managed and handled.

4. Ensuring traceability and monitoring

  1. (1) We ensure traceability according to the levels of associated risks and implement Paragraphs 1 to 3 of the Policies above throughout our supply chain during our procurement activities.
  2. (2) We conduct monitoring and aim to minimize the risk and impact of the implementation of Paragraphs 1 to 3 of the Policies.
  3. (3) We conduct interviews with suppliers who do not conform with Paragraphs 1 to 3 of the Policies, request improvement, and provide support to help with such improvement. If no improvement is made, we review whether to continue transactions with them.

5. Communication with stakeholders

  1. (1) We reflect on our dialogues with stakeholders on our processes to improve our procurement activities.
  2. (2) We actively disclose information about the Group's procurement activities.

(Established on October 5, 2005, and revised on September 1, 2022)

Wood Resources Procurement Guidelines

The Nippon Paper Group is committed to addressing social and environmental challenges including human rights issues in accordance with the "Principles and Basic Policies Concerning Raw Materials Procurement". The Group strives to source its raw materials according to the "Wood Resources Procurement Guidelines" below in order to use forest resources sustainably.
* Applicable to whole logs, wood products, woodchips and pulp for paper manufacture, and wood biomass for fuels that have been procured by Nippon Paper Industries Co., Ltd. or its consolidated subsidiaries in order to manufacture their relevant products.

  1. 1. We do not procure illegally harvested wood.
  2. 2. We are committed to the promotion of zero deforestation and do not engage in procurement that is complicit in forest reduction or degradation.
  3. 3. We do not engage in procurement that contributes to the degradation of forests that are categorized as High Conservation Value (HCV), such as forests with biodiversity importance, and forests with High Carbon Stock (HCS).
  4. 4. We promote forest resource management and resource procurement that contribute to the increase of CO2 absorption and fixation from forests.
  5. 5. We strive to vitalize the forestry industry of relevant countries and promote the use of wood resources originating from the countries where products are manufactured for the Group.
  6. 6. We promote the use of recycled materials such as sawmill residues, wood construction waste, and unused wood materials.
  7. 7. We aim to increase procurement of wood resources that are audited or certified by third parties, such as forest certification systems.
  8. 8. We ensure traceability of the wood resources we procure to confirm the point of origin, the forest type, and the forest management method.
  9. 9. We actively hold dialogues and engage with our suppliers to promote communication throughout the supply chain.

( Established on September 1, 2022)

Basic Policy on the Preservation of Biodiversity

Principle

The Nippon Paper Group, a corporate group to which forest resources are of fundamental importance, appreciates the natural gifts bestowed by biodiversity and, by preserving biodiversity, aims to help create a sustainable society that can continuously enjoy ecosystem services.

Basic Policy

  1. 1.Recognizing the protection of biodiversity as a critical social issue, we will work to pursue business activities that are in harmony with the sustainable use of ecosystem services.
  2. 2.In supply-chain management, we acknowledge the impacts on biodiversity of cross-border use of ecosystem services, and will manage our ecosystem service usage properly.
  3. 3.In an effort to reduce environmental impacts on biodiversity, we will actively work to recycle and save resources.
  4. 4.We will promote the development of technologies, products, and services that contribute to the preservation of biodiversity and the sustainable use of ecosystem services.
  5. 5.Endeavoring to raise employees' awareness of biodiversity, and collaborating with stakeholders, we will contribute to the building of a society that nurtures biodiversity.

(Established April 1, 2016)

Philosophy and Basic Policy on Product Safety

Philosophy

We pledge to work to improve safety at every stage of the life cycle of our products, from design to manufacture, supply, and disposal, and to provide products and services that the public can trust.

Basic Policy

  1. 1.To provide safe products and services in response to the continued trust of our customers.
  2. 2.To respect related laws and standards in order to guarantee the safety of our products and services. We pursue safety not only as expected under Japanese laws but also from a global perspective.
  3. 3.To provide customers with precise information on the safety, features, and correct usage of our products.
  4. 4.To set up a product and service safety management structure and ensure that all group employees have a thorough awareness of the importance of product safety.

(Established on October 1, 2004, revised on August 1, 2014)

The Nippon Paper Group Human Rights Policy

The Nippon Paper Group adopted the "Philosophy and Basic Policy on Human Rights, Employment and Labor" on October 1, 2004, stipulating respect for human rights, including non-discrimination, prohibition on forced labor and child labor. We also adopted the "Philosophy and Basic Policy Concerning Raw Materials Procurement" on October 5, 2005, stipulating respect for human rights through the entire supply chain as a basic policy, and thereby promoting dialogues with stakeholders concerning raw materials procurement.

Against this backdrop and based on these previous measures taken, we hereby adopted the Nippon Paper Group Human Rights Policy, aiming at fulfilling our group mission, "contributing to better living and cultural progress everywhere it does business", and in order to ensure increased effectiveness in respecting human rights.

This Policy was drafted in accordance with the international standards including principles concerning fundamental rights expressed in the International Bill of Human Rights and the ILO Declaration on Fundamental Principles and Rights at Work, guided by the UN Guiding Principles on Business and Human Rights, and with advice given by external experts. The Policy was approved by the board of directors of the Nippon Paper Industries, Co., Ltd. on May 30, 2022.
This Policy is drafted in dual languages (Japanese and English) and is made known to all stakeholders by disclosing it through website of the Nippon Paper Group.

■Scope of Application and Expectations for Business Partners
This Policy applies to all directors, officers, and employees of the Nippon Paper Group. The Nippon Paper Group expects that our business partners, including suppliers, promote measures concerning respect for human rights in collaboration with us, and we will exercise leverage for their support and compliance with this Policy.

■Compliance with Applicable Laws and Regulations
The Nippon Paper Group complies with laws and regulations applicable in each country and region where we conduct business activities. Provided that, in case there is any conflict between the international human rights standards and laws and regulations of each country and region, we will seek ways to honor the principles of the internationally recognized human rights.

■Human Rights Due Diligence
The Nippon Paper Group establishes the process of human rights due diligence in accordance with the steps based on the UN Guiding Principles on Business and Human Rights, and endeavors to prevent or mitigate adverse impacts on human rights.

■Dialogue and Consultations with Stakeholders
In implementing this Policy, the Nippon Paper Group will hold sincere consultations with stakeholders potentially affected by our business activities.

■Education
The Nippon Paper Group provides periodic education and training for all directors, officers, and employees to ensure appropriate implementation of this Policy.

■Remedies
In case we identify that we have caused adverse human rights impacts directly or indirectly, the Nippon Paper Group will take remedial measures through dialogue and appropriate procedure, utilizing existing grievance mechanisms. In particular, as grievance mechanisms in accordance with the UN Guiding Principles on Business and Human Rights, we notify and operate the "Nippon Paper Group Helpline", which enables consultation and direct reporting for all directors, officers, and employees. We also operate the "Application Form for Inquiries concerning the Nippon Paper Group", which enables reporting from outside companies through our website.

■Information Disclosure
The Nippon Paper Group discloses information on measures taken concerning human rights through our website, etc..

■Material Issues concerning Human Rights
The Nippon Paper Group recognizes our material issues concerning human rights as attached, and will proceed with measures to respect human rights based on this Policy. We will try to review material issues at an appropriate timing following changes in social circumstances or business trends.

Date of adoption: May 30, 2022

[Annex attached]

[Annex]

1.
1. Prohibition on Discrimination and Harassment
We do not discriminate people on grounds including nationality, race, national origin, sex, age, religion, disease, disability, sexual orientation and gender identity. We do not conduct any act of harassment, including sexual harassment and power harassment.
2. Prohibition of Forced Labor and Child Labor
We do not allow forced labor in any form of employment. We do not allow employment of children under minimum age of employment specified by laws and regulations of each country and region.
3. Respect for Labor Rights
We respect workers' freedom of association, right to collective bargaining and right to act collectively. We strive to prevent low-wage labor and excessive working time.
4. Facilitation of Pleasant Working Environment
We understand the importance of occupational safety and health as well as maintaining workers' work-life balance, and try to promote physical and mental health. We establish and maintain structures to make the most of the individuality and capabilities of a diverse range of human resources, and promote personal training and skill development programs to help improve individual employees' abilities and skills.
5. Co-existence with Regions and Local Communities
We understand the possibility that our business activities could give impact on local communities, including socially vulnerable group of people, including children, older persons, indigenous peoples, migrants, national and ethnic minorities, and different risks that may be faced depending on attribution including sex. We will strive to coexist with local communities. We also endeavor to conserve environment which future generations may live without anxiety.

Philosophy and Basic Policy on Safety and Health Measures

Philosophy

In addition to acknowledging that it is the company's duty to guarantee safety and health, and to strive to develop pleasant, improved working conditions, we pledge to work ceaselessly to prevent any and all accidents, minor or major.

Basic Policy on Safety and Health

  1. 1.To respect the Industrial Safety and Health Law.
  2. 2.To establish self-imposed standards and step up daily management.
  3. 3.To set up a management structure and clearly define roles, responsibilities, and authority.
  4. 4.To strive to improve safety and health training.
  5. 5.To develop and maintain a safe, pleasant working environment.

Basic Policy on Safety and Risk Prevention

  1. 1.To respect laws and regulations pertaining to safety and risk prevention.
  2. 2.To establish self-imposed standards and step up daily management.
  3. 3.To set up a management structure and clearly define roles, responsibilities, and authority.
  4. 4.To strive to improve safety and risk prevention education and training.
  5. 5.To work in cooperation with related government and local communities and share information.

(Established on October 1, 2004)

Philosophy and Principles for Social Contribution Activities

Philosophy

As a member of society, we shall proudly promote activities that contribute to social development.

Principles

  1. 1.We shall pursue activities that contribute to cultural heritage and development.
  2. 2.We shall pursue activities that contribute to conservation and improvement of the environment.
  3. 3.We shall pursue activities that contribute to the development of communities.

(Established on April 1, 2004)
The Nippon Paper Group