Based on our Corporate Philosophy of “Contributing to humanity and society as a corporate group that creates new value through the power of chemistry, from the biosphere to outer space,” we have clearly stated “respect for human rights” in our Basic CSR Policy and NOF Group Corporate Code of Ethics, and are promoting initiatives to respect human rights. As the NOF Group expands its business globally, we support and respect international norms such as the ILO Declaration on Fundamental Principles and Rights at Work, OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, the UN International Bill of Human Rights, the UN Guiding Principles on Business and Human Rights, the Ten Principles of the UN Global Compact, and the Government of Japan’s National Action Plan on Business and Human Rights. To fulfill our responsibility to respect human rights throughout all corporate activities, including the prohibition of child labor, forced labor, and human trafficking, as well as the exercise of freedom of association and the right to collective bargaining, we established the NOF Group Human Rights Policy in fiscal 2021, which applies to all executives and employees of the Group. For this, we respect not only the international norms listed above, but also the culture, customs, history, and labor-related laws and regulations of the countries and regions in which we do business. This also includes addressing harassment based on race or nationality (racial harassment).
We also consider and implement initiatives to address human rights risks that could arise in our business activities. Specific examples of activities include conducting NOF Group employee engagement surveys to check the status of human rights compliance within the company, taking corrective actions on identified issues, and carrying out CSR questionnaires to suppliers across the supply chain to assess the status of respect for internationally recognized human rights.
Furthermore, we worked on spreading awareness of the values in the revised Corporate Philosophy and Guiding Framework, revised in April 2023. In April 2025, we revised the former Corporate Code of Ethics to become the NOF Group Corporate Code of Ethics and communicated this to Group companies in Japan and overseas by distributing a booklet. We are also asking employees for a deeper understanding by deploying an educational video across the entire Group in April 2026. We will continue to work to reduce human rights risks by further deepening our human rights due diligence efforts through enhanced employee education, dialogue with stakeholders, and other means.

Strengthening human rights due diligence may increase costs and on-site workloads and cause conflicts with suppliers or procurement delays due to investigations, responses, and supplier audits. On the other hand, it enables early detection and correction of serious risks such as child labor, forced labor, and harassment; prevents legal sanctions, lawsuits, and reputational damage; and helps enhance brand trust and investor assessments, stabilize the supply chain over the long term, and secure new market opportunities. Although these measures entail short-term burdens, they can help preserve value over the long term.
Strengthening harassment measures may increase costs through supervision, training, and reporting systems, inhibit communication, and increase recruitment burdens. Conversely, enhancing employees’ sense of security in the workplace reduces turnover, raises productivity, and maintains reputation, leading to long-term employee retention and greater corporate value.

The NOF Group has established a human rights due diligence framework in line with the procedures outlined in the UN Guiding Principles on Business and Human Rights. We continuously work to prevent or mitigate adverse impacts on human rights by proactively identifying and investigating issues based on the opinions of external experts, and taking corrective action through appropriate means. First, to identify the human rights risks that the NOF Group should prioritize, we conducted the Group’s first company-wide human rights risk assessment in FY2025.

We assessed human rights risks using the following process.
　

1.Organize Human Rights Issues (Prepare a Human Rights Issues List)
Prepare a human rights issues list taking into account the NOF Group’s business characteristics and various guidelines
　

2.Organize the Value Chain (Prepare Value Chain Flows)
Organize the value chain for each NOF Group business division and determine the scope of risk assessment
　

3.Identify Human Rights Risks (Establish Worst-Case Scenarios)
Identify human rights risks based on the human rights issues list and value chain flows and establish worst-case scenarios
　

4.Assess Human Rights Risks
Conduct a human rights risk assessment questionnaire for NOF division heads, location heads, and presidents of affiliated companies. Assess severity, including scale, scope, and difficulty of remediation, and likelihood of occurrence
　

5.Aggregate Human Rights Risks
Aggregate questionnaire results and determine the Group-wide assessment
　

6.Prepare a Human Rights Risk Map
Map each risk by severity and likelihood based on the assessment results
　

7.Determine Priority Risks
Identify human rights risks requiring priority monitoring with reference to the human rights risk map and the NOF Group’s business characteristics
　

8.Report to the Board of Directors
Report priority human rights monitoring risks and the risk map to the Board of Directors for approval

We prepared a list of potential human rights issues related to the NOF Group’s businesses with reference to international human rights norms such as the UN International Bill of Human Rights, the Ten Principles of the United Nations Global Compact, the UN Guiding Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, and the OECD guidelines for multinational enterprises on Responsible Business Conduct, as well as materials from human rights experts, human rights defenders, academics, governments, NGOs, and other specialists.
The human rights issues covered are broadly classified into the following four categories.
　

• A：Risks related to labor within our operations and supply chain
• B：Risks to consumers and customers related to products and services
• C：Risks to local communities arising from business activities
• D：Grievance channels for each risk in A through C

We identified potential human rights risks for these four categories, established worst-case scenarios taking into account the Group’s business characteristics, and conducted the assessment.

The NOF Group comprises five distinct businesses: Functional Materials, Metal Coatings, Functional Foods, Life Science, and Explosives & Propulsion. For this human rights risk assessment, we comprehensively identified human rights risks by clarifying the stakeholders involved in the five NOF Group businesses, from raw material procurement and manufacturing through the supply chain to disposal.

We mapped each human rights issue for our company and the supply chain, with severity on the vertical axis and likelihood of occurrence on the horizontal axis. For identified high-risk human rights issues, we will first monitor the risks. If the results of monitoring indicate a need for risk reduction, we will consider and implement specific countermeasures.

Based on the human rights risk assessment results and the NOF Group’s business characteristics, we defined the following human rights risks as requiring priority monitoring. No serious human rights violations were identified as a result of the human rights due diligence conducted in FY2025. Going forward, we will periodically monitor cases falling under these risks and promptly develop and implement measures where action is required.

The whole NOF Group, including the staff of cooperating companies assigned to NOF’s works and plants, is making all-out efforts to eradicate occupational accidents. The NOF Group has clearly expressed its determination to make its workplaces secure and safe for all the workers involved in Group activities, and to realize this ideal, set forth its Occupational Safety and Health Policy in April 2006. The major initiatives are as follows.Please refer to page 209 for information on the occurrence of occupational accidents.

　
1.Development of OSHMS (Occupational Safety and Health Management System)*
The NOF Group, under its Occupational Safety and Health Policy, is undertaking buildup of the Occupational Safety and Health Management System (OSHMS). Referencing the guidelines of the International Labor Organization and the Ministry of Health, Labour and Welfare, we are building up our own system and promoting activities. The Risk Assessment program, which started in fiscal 2008 at all works and plants of the NOF Group, has now been adopted by Domestic Group companies as well.
　

2.Implementation of various training and drills
The NOF Group conducts a variety of training programs, including safe forklift operation, handling of hazardous and chemical substances, prevention of slips, falls, chemical burns, and heatstroke in the workplace, as well as disaster preparedness and BCP drills.

In order to reduce prolonged working hours and enrich employees’ lives outside of work through improved operational efficiency and productivity, the NOF Group is thoroughly enforcing proper labor management and promoting initiatives to reduce working times. These include restricting work after the regular working hours and introducing a work interval system.

The NOF Group has set up consultation desks in Japanese, English, Chinese (Simplified Chinese), Korean, Indonesian, and Portuguese at external third-party institutions as contact points for whistleblowing and consultation in overseas countries where the NOF Group’s business bases are located. Employees can contact the desks if they become aware of a violation or potential violation of compliance rules.
In fiscal 2025, we received a total of 29 reports, mainly concerning harassment and workplace management. We carefully investigated the facts of each report promptly and without searching for the whistleblower, and took necessary corrective actions and measures to prevent recurrence. For example, in harassment-related reports, we issued guidance to the reported individuals or imposed disciplinary actions.

Since fiscal year 2022, NOF Group has conducted an employee engagement survey for Company employees to investigate the occurrence of harassment within the Company, respect for privacy, treatment and evaluation of women and non-Japanese employees, occupational safety and health in the workplace, and awareness of whistleblowing contact points and disadvantageous treatment. Responses were received from 1,972 respondents in fiscal 2025.
Some of the results of the survey are as follows. Employees who responded that they knew of the reporting channels accounted for 95.8% of the total, an improvement of 1.5 percentage points from FY2024. Conversely, 30.0% responded that they did not know the contact details, up 0.9 percentage points, indicating a need for more targeted efforts to raise employee awareness.
Meanwhile, in response to the question, “Has awareness that discrimination and harassment are unacceptable been firmly established in the workplace?,” 80.7% of employees responded that “Awareness has been fully established” or “Awareness has been somewhat established,” an increase of only 0.4 percentage points from FY2024. Of these, 30.1% responded that it was “fully established,” a decrease of 5.2 percentage points from FY2024.
To address these issues, we will use the Corporate Code of Ethics revised in April 2025 to raise awareness among all employees and plan company-wide training beginning in FY2026 to develop on-site leaders as “Compliance Leaders.”

Examples of comments from the employee engagement survey
　

Establishing awareness of harassment

• Training for new graduates and younger employees has also been enhanced, and awareness-raising has become thorough. (30s, male)
• I feel that the claims of those alleging harassment have become too strong. (20s, male)

Establishing awareness of respect for privacy

• There are more privacy-conscious conversations, making the workplace feel safer. (30s, male)
• People sometimes discuss my private life or family circumstances without permission. (20s, male)

Diversity, treatment, and evaluation

• I feel that employees are evaluated fairly regardless of gender, age, or other attributes. (Age 50 or older, male)
• There are large wage differences among regular employees, commissioned clerical employees, and region-specific employees. (Age 50 or older, male)

Use of leave systems

• Many operations depend on specific individuals, making it difficult to take refreshment leave. (30s, male)
• During busy periods, there is still an atmosphere that makes it difficult to request leave. (40s, female)

Ensuring safety and health

• I appreciate the initiatives to improve the work environment. (40s, female)

Awareness of whistleblowing contact points

• All new employees are informed about whistleblowing contact points and consultation systems. (30s, female)
• Some employees say they would hesitate to use them in practice. (Age 50 or older, male)

Prohibition of disadvantageous treatment

• The prohibition of disadvantageous treatment has been institutionalized and is becoming widely understood. (40s, female)
• I worry that expressing my opinion could affect my treatment or career. (Age 50 or older, male)

The NOF Group established the CSR Procurement Policy for stable, sustainable procurement. In addition, we created the CSR Procurement Guidelines that compile measures the NOF Group implements and requests its suppliers to implement.
Furthermore, when signing a new basic purchasing contract with a business partner, we decided to add a clause stating efforts to comply with the NOF Group’s CSR Procurement Policy and CSR Procurement Guidelines.

In the procurement unit, we provide our main suppliers with necessary explanations on the NOF Group’s CSR Procurement Policy and conduct questionnaires on the status of CSR activities at our main suppliers, using the CSR/Sustainable Procurement Self-assessment Questionnaire created by the Global Compact Network Japan (GCNJ) to improve the objectivity of the questionnaire.
Most recently, we surveyed our major suppliers from fiscal 2023 to 2024 and achieved a coverage rate of 92% based on purchase amount.
The average scores of questions related to human rights are shown in the table below. Suppliers with scores below 50 points are considered to have potential human rights risks. Interviews were conducted in fiscal 2025 to confirm whether there were any human rights risks at suppliers, but no suppliers have been found to have human rights risks as of now.
　

As a target under the 2028 Mid-term Management Plan, we set a KPI of an improvement rate*2 of at least 75% among the 24 suppliers*1 interviewed under the 2025 Mid-term Management Plan.

1. Selected with a focus on (1) overall score rate and (2) human rights item score rate
2. Percentage of companies showing improvement in either applicable item under (1) or (2)

The existence of human rights and labor problems has long been noted in the oil palm plantations where palm oil is produced. The NOF Group joined the Round-table on Sustainable Palm Oil (RSPO) in FY2012 and obtained supply chain certification from the organization in FY2014. NOF, a founding member of the Japan Sustainable Palm Oil Network (JaSPON) which was launched in Japan in 2019, conducts activities to procure sustainable palm oil.

With regard to conflict minerals (3TG*1) that may have an impact on human rights and other issues, we use the Responsible Minerals Initiative (RMI*2)-prescribed Conflict Minerals Reporting Template (CMRT*3) and conduct questionnaire surveys of all key business partners. Furthermore, starting from fiscal 2023, we have initiated a survey using the Extended Minerals Reporting Template (EMRT*4), a unified format for target minerals cobalt and natural mica, with our key business partners.
　

1. Refers to the four minerals of tin, tantalum, tungsten, and gold extracted in the Democratic Republic of Congo and neighboring countries
2. Abbreviation for Responsible Minerals Initiative
3. Abbreviation for Conflict Minerals Reporting Template
4. Abbreviation for Extended Minerals Reporting Template

The NOF Group recognizes compliance as a foundation that supports the company and believes it is crucial to prevent or promptly correct incidents that violate laws, regulations, and the NOF Group Corporate Code of Ethics, or involve human rights abuses, to avoid them becoming severe or prolonged. To this end, we have established contact points for whistleblowing outside the Company, including our business partners.

The aforementioned contact point for whistleblowing from outside the Company accepts reports not only from suppliers but also from NOF Group customers. To date, we have not received any reports on human rights (violations) through the contact point.