Sustainability

ESG Management

Basic Approach

With the Sustainable Development Goals (SDGs) adopted by the United Nations in mind, the NGK Group seeks to provide new value to society with our unique ceramic technologies, thus contributing to the realization of a sustainable society and winning positive expectations and trust from society. This is NGK’s basic view on sustainability. We formulated the NGK Group Vision: Road to 2050 based on the NGK Group Philosophy of enriching human life by adding new value to society. We will continue to leverage our unique ceramic technologies towards the realization of carbon neutrality and a digital society.

ESG Action System

ESG (Environmental, Social, Governance) is central to the management of the NGK Group. Amidst ongoing overseas business expansion, we seek to ensure greater managerial transparency and autonomy within an environment which cultivates within every member of the NGK Group a sense of fairness accompanied by decision-making and action in accordance with international norms.
In 2019, the ESG Committee was established as a body for information sharing, opinion exchange and policy discussion among senior management. In 2021, the ESG Management Department was established in order to handle lateral implementation of ESG-related activities across the NGK Group and to strengthen information dissemination about the activities. Furthermore, in April 2022, the ESG Committee was reorganized as the ESG Management Committee, which is chaired by the President, as an enhanced body to handle initiatives on sustainability issues that incorporate elements of ESG and the SDGs and oversee the Board of Directors.

ESG Action System

This is a diagram of the ESG Action Framework. Under the ESG Management Committee chaired by the President, seven committees discuss ESG issues.

Key ESG Activity Themes in FY2022

Key themes	Main activities	Activity leader
Environmental initiatives aimed at achieving NGK Group Environmental Vision	Internal carbon pricing towards net zero CO₂ emissions, energy-saving, shift to non-fossil fuels, use of renewable energy Visualization of greenhouse gas emissions during the lifecycle of main products Formulation and follow-up on 5-Year Environmental Action Plan and annual plan Response to a recycling-oriented society Response to biodiversity	Environment Action subcommittee
Climate change countermeasures	Specific initiatives on the four themes outlined in the TCFD recommendations: governance, strategy, risk management, and metrics and targets	TCFD subcommittee
Initiatives on respect for human rights	NGK Group human rights due diligence Promotion of hiring, cultivation of human resources and improvement of labor practices Diversity and inclusion	HR Committee Environment, Safety & Health Committee
Supply chain rollout	Implementation of CSR procurement (human rights, labor, environment, and fair business activities, etc.) Assessment of Scope 3 in carbon neutrality	Supply Chain subcommittee HR Committee
Continuous review of the governance system	Integration of management with sustainability issues Strengthening of the supervisory function of the Board of Directors Compliance with Corporate Governance Code Ensuring of appropriate information disclosure and transparency	Governance subcommittee
Social Contribution Activities	Summary and disclosure on NGK Group’s social contribution activities Support for foreign nationals	Social Contribution Activities subcommittee

FY2021 ESG Committee Achievements

Times	Date	Topics of discussion
1st	April 2021	Decisions on FY2021 action plans and key themes
2nd	June 2021	Review of the operations of the Board of Directors and Executive Committee
3rd	July 2021	Planning and progress of FY2021 Net Zero CO₂ Emissions project Summary of the fourth 5-Year Environmental Action Plan, and annual targets of the fifth 5-Year Environmental Action Plan
4th	October 2021	Planning and progress of the FY2021 Carbon Neutrality (CN) new business promotion project
5th	November 2021	Social Contribution Activities Compliance with the revised Corporate Governance Code
6th	December 2021	Report on Net Zero CO₂ Emissions project Progress report on the TCFD Task Force
7th	February 2022	Towards achieving ESG management (activity outline for next fiscal year)
8th	March 2022	Measures to improve ESG rating
9th	March 2022	Information disclosure based on TCFD recommendations Support for Science Based Targets (SBT) and Renewable Energy 100 (RE100)

NGK Group signs UN Global Compact

The NGK Group is a signatory to the United Nations Global Compact, which advocates for independent action on the part of companies, endorsed by the United Nations. We believe that addressing a broad range of social problems through our business activities, while measuring progress against indicators such as the Sustainable Development Goals (SDGs), is an important corporate social responsibility.

Communication with Stakeholders

In addition to promoting understanding regarding the NGK Group among customers, suppliers, shareholders, investors, regional communities, governments, international organizations, universities, research institutes, and employees, we are continuously improving our activities and initiatives through dialogue with all of our stakeholders.

This diagram illustrates the relationship between the NGK Group and its stakeholders. NGK Group is surrounded by customers, suppliers, shareholders, investors, regional communities, governments, international organizations, universities, research institutes, and employees.

Basic approach

In the NGK Group Code of Conduct, our commitment to “Disclosure of Company Information and Accountability” as a part of stakeholder communication is expressed through the following.

Disclosure of Company Information and Accountability

	We will increase healthy and transparent management by active disclosure of information and discussion with stakeholders. We will accurately and promptly disclose information required by society. We will take seriously the voices of our stakeholders and fulfill our obligation of accountability.

We will increase healthy and transparent management by active disclosure of information and discussion with stakeholders.

We will accurately and promptly disclose information required by society.
We will take seriously the voices of our stakeholders and fulfill our obligation of accountability.

NGK Group Code of Conduct

Stakeholder Engagement

Stakeholders	Approach	Communication (objectives)	Communication (methods)
Customers	To earn and maintain the trust of customers, we engage in the creation of new value through the provision of products and services realizing global environmental conservation and social safety and peace of mind from a long-term and global perspective.	Enhancement of customer satisfaction Quality improvement	Official website Contact desk Participation in exhibitions Open innovation
Procurement Partners	With a basic policy centered on the three principles of openness and fairness, partnership, and relationship with society, the NGK Group is engaged in fair, free, and transparent business transactions with the procurement partners in our supply chain. We also established a supplier helpline to provide unwavering support for important inquiries in an effort to build and maintain fair supplier relationships.	Realize fair, free, and transparent transactions Exchange information with suppliers Establish better supply chain	Financial results presentations Supplier helpline Individual visits to suppliers in Japan and overseas
Shareholders and Investors	The NGK Group aims to meet expectations for enhanced corporate value through dialogues and efforts to disclose information pertaining to management, finance, products, and services in a timely and appropriate manner.	Enhancement of corporate value	General Meeting of Shareholders Information sessions Individual visits and interviews Participation in IR events Responding to ESG investment Official website
Employees	The NGK Group strives to create a safe and comfortable workplace environment with respect for employee humanity. We also support the growth of human resources and fair treatment enabling each employee to maximize their skills.	Respect for the human rights of employees Development of safe and comfortable workplace environments Conducting of surveys on workplace environment and employee satisfaction Penetration of corporate philosophy and policies	Company newsletter Global MIZUHO English-version company newsletter In-house video newsletter Intranet Labor-Management Advisory Board meetings, regular Labor-Management Council meetings Survey on workplace vitality CRS (Corporate Risk Survey) Helpline Hotline
Regional Communities	We proactively engage in social contribution activities in response to community needs with the intent of becoming a corporate citizen trusted by society with concern for social issues in all countries and regions where we do business.	Contribution to regional communities as a trusted corporate citizen	Collaborative activities with NPOs, etc. Volunteer activities by employees Social contribution activities in cooperation with labor unions Invitation to plant tours and events
Governments and International Organizations	We proactively participate in international initiatives and other activities in order to realize mutual cooperation as key actors seeking to resolve social issues.	Promotion of initiatives to resolve social issues	Participation in international initiatives
Universities and Research Institutes	Through research and educational activities based on industry–academia collaboration, we have been pushing forward with the development of scientific technologies and other technologies that will contribute to resolving social issues.	Development of scientific technologies Development of technologies that will contribute to solving social issues	Joint research

Position on SDGs

Ever since its foundation, the NGK Group has pursued business in the energy, ecology, and electronics sectors in an effort to keep nature’s air and water clean and thus help people live a comfortable, healthy life. Many of our technologies and products contribute to the SDGs, and we will continue to provide new value by leveraging our unique ceramic technologies towards the realization of a sustainable society.

Goals		Value provided by the NGK Group
	End poverty in all its forms everywhere	Creating appropriate employment helps to end poverty The NGK Group’s climate change countermeasures help mitigate natural disasters
	End hunger, achieve food security and improved nutrition, and promote sustainable agriculture	The social infrastructure created by the NGK Group’s products helps secure equal access to work opportunities
	Ensure healthy lives and promote well-being for all at all ages	High-output, high-efficiency semiconductor lasers using gallium nitride (GaN) wafers are a substitute for ultra-high-pressure mercury lamps, thus contributing to reduced use of mercury Micro-lenses are increasingly used instead of mercury in UV LED light sources for applications such as the sterilization of water and air, thus contributing to reduced use of mercury Ceramics for purifying automobile exhaust make exhaust gas clean
	Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all	Creating appropriate employment gives people the chance to have equal access to education
	Achieve gender equality and empower all women and girls	The social infrastructure created by the NGK Group’s products helps provide more opportunities for women to enhance their abilities Securing equal opportunities for women to participate and be leaders in society
	Ensure availability and sustainable management of water and sanitation for all	Ceramic membrane filters provide highly safe water Ceramic membrane filters purify wastewater
	Ensure access to affordable, reliable, sustainable, and modern energy for all	Insulators are indispensable to stable power supply NAS batteries allow stable supply of renewable energy Ceramics for purifying automobile exhaust make exhaust gas clean, thus enabling clean usage of fossil fuels
	Promote sustained, inclusive and sustainable economic growth, full and productive employment, and decent work for all	Creating appropriate employment and providing employees with a satisfying work environment contributes to economic growth
	Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation	Thin lithium-ion rechargeable batteries provide power for the new IoT generation Ceramics used in electronics make ICT cheap and ubiquitous Ceramics for semiconductor manufacturing equipment let the semiconductor industry be the foundation for modern daily life Metal-related products are widely used in mobile phones, automobiles, industrial equipment, and other devices that undergird modern life
	Reduce inequality within and among countries	We prevent discrimination and take prompt and appropriate action when violations occur
	Make cities and human settlements inclusive, safe, resilient, and sustainable	NAS batteries enable innovation in urban energy management for the creation of sustainable cities
	Ensure sustainable consumption and production patterns	We efficiently use the natural resources used to make ceramics
	Take urgent action to combat climate change and its impacts	NAS batteries aid in the ﬁght against climate change by allowing stable supply of renewable energy
	Conserve and sustainably use the oceans, seas, and marine resources for sustainable development	Ceramic membrane filters purify wastewater to prevent marine pollution
	Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss	We protect biodiversity on land owned by the NGK Group
	Promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable and inclusive institutions at all levels	We comply with the rules and regulations of the countries and regions in which we do business, and ensure respect for and strict compliance with international treaties
	Strengthen the means of implementation and revitalize the global partnership for sustainable development	We encourage and promote effective partnerships among governments, corporations, and society as a whole