ESG Report of YAMAGATA (Wuxi) Co., Ltd.

ESG is a development strategy and sustainable investment practice of enterprises that care about environmental, social, and governance factors. This concept has been under great attention in the international community since it was brought up by the United Nations Environment Programme (UNEP) in 2004. Today, ESG has been followed by mainstream enterprises worldwide as a framework for disclosure of sustainable development information, providing the core framework and internal criteria for high-quality development of enterprises.

ESG stands for Environmental, Social, and Governance.
YAMAGATA (Wuxi) Co., Ltd. is gradually introducing the idea of sustainable development to each sector of corporate management. We will continuously improve our sustainable development management system, strengthen communication and exchange with our stakeholders, and provide effective solutions to environmental, social, and governance issues faced with us in sustainable development. The following are the specific ESG measures we have taken:

Environmental (E): Climate change, use of resources, waste management, and how to seize the opportunities brought by the environment

YAMAGATA (Wuxi) has developed an environmental management system in compliance with ISO 14001 since its foundation in 2003. In this system, the legal representative serves as the top leader to supervise all environmental deployments and manage environmental activities in strict accordance with applicable laws and regulations. Following this system, we integrate environmental management and chemical management into routine production and operation management.

1. Use clean raw materials to reduce the environmental load from the source.

• Choose low-VOC environmentally friendly ink.
• Stop using isopropyl alcohol and use semi-aqueous cleaning agent or other low-VOC organic solvents instead.
• Use recycled paper products, including OBM recycled paper, Raicho recycled paper, rice straw paper, cold-set environmentally friendly paper, and OJI recycled double-sided wrapping paper.
• Use water-based oil in place of plastic for laminating to ensure stable surface treatment while avoiding use of plastic.

2. Use pipeline-based centralized ink supply equipment to deliver ink from large containers, producing a much smaller amount of hazardous solid waste than systems using small ink tanks.
   
   
3. Use specialized equipment to recycle industrial waste water during production, which significantly improves the utilization of water resources and reduces hazardous waste liquids to be treated.
   
   
4. Set recycling bins.
   
5. Take part in sustainable development and protection of forests after being certified by the Forest Stewardship Council (FSC) again in 2022.
   
   
6. Join in the Science-Based Targets Initiative (SBTi) in 2024 and set a short-term goal of reducing carbon emissions by 42% by 2030.
   

• • Build a rooftop solar PV generation system to produce clean energy. Now, clean energy accounts for about 20% of energy used by the company.
    
  • Replace steam humidifiers with wet membrane humidifiers.
  • Illuminate all areas with LED lights and use sensor lights in public areas.
  • Carry out a 1-hour light off program every day.
  • Disclose carbon emission data and information about sustainable development of YAMAGATA (Wuxi) on the CDP and EcoVadis platforms every year.
    
    

Social (S): How the company establishes sound relationships with employees, clients, suppliers, communities, and other stakeholders, and brings positive influences to them

YAMAGATA (Wuxi) has developed a CSR management system and issued relevant documents to clarify details on how to manage corporate social responsibilities concerning human rights, labor, and other elements.

1. Establish a labor union and Party branch for democratic management, and uphold the freedom of association.
   
   
   Interesting employee activities organized by the labor union and Party branch of YAMAGATA (Wuxi)
2. Organize environmental protection activities among employees, such as tree planting and garbage collection.
   
   
   Labor union and Party branch of YAMAGATA (Wuxi) in tree planting organized in 2024
   
3. Develop digital mini-courses to enrich employees’ professional skills and knowledge of quality management and CSR.
   
4. Make active efforts to do social good. YAMAGATA (Wuxi) has made regular donations to school-age children in impoverished mountainous areas for over 10 consecutive years, delivering our care and warmth to people in remote areas.
   
   “Love under Blue Sky” Warm Winter Program organized by YAMAGATA (Wuxi) in 2020
   
   “Love under Blue Sky” Warm Winter Program organized by YAMAGATA (Wuxi) in 2023
5. Pass BSCI and SMETA audits
   
   BSCI audit rating: B
   
   
   SMETA audit: qualified

Governance (G): Key governance factors of the company, including the management structure, standards compliance management, risk management, and internal control

YAMAGATA (Wuxi) is optimizing the standards compliance management system, imparting awareness of standards compliance to suppliers, and training employees in batches to improve corporate governance and strengthen risk control.

As a step of our ESG strategy, we have joined in the Green Deposit Program initiated by Mizuho Bank to invest surplus funds in renewable energy, energy-saving industries, and other green projects beneficial to environmental improvement. By indirectly funding green credit finance, we have fulfilled the commitment to ESG investment and achieved our goal of environmental protection, energy saving and emission reduction.