Sustainability

Respect for Human Rights

• Promotion System
• Human Rights Policy
• Initiatives

Promotion System

In EXEDY, we have assigned oversight responsibility for respect for human rights to our Risk Management Committee.
In the committee, the President & CEO is ultimately responsible for risk management, and the Representative Director and Senior Executive Managing Officer of the Administrative Headquarters is responsible for overall risk management, deliberating and deciding on systems and activity plans related to respect for human rights.
Also, the Administrative Headquarters serves as the secretariat for these initiatives and promotes them in cooperation with related departments.

EXEDY Group Human Rights Policy

Under the corporate philosophy of "Creation of Fulfillment (for our customers, society and our employees)", the EXEDY Group has been working on the development of energy-saving products through its advanced technological capabilities, while taking on the challenge of solving environmental and social issues by contributing to local communities and promoting diversity. We intend to continue to grow and evolve as a global company and contribute to the realization of a sustainable society by creating new value in the form of Next Generation Electrified Products and Future Products, and by promoting initiatives to create a decarbonized society. Furthermore, we are intensely aware that respect for human rights forms the foundation of these business activities. We must deepen our understanding of and take appropriate action for various human rights issues related to our activities in each country and business.

This policy ensures that the EXEDY Group, which operates globally, respects internationally recognized human rights and complies with applicable laws and regulations of each country where we conduct business based on the United Nations Guiding Principles on Business and Human Rights. This policy stands as the most significant policy related to human rights in our business activities.

1. Commitment to Respect for Human Rights

The EXEDY Group understands that our business activities ranging from research, development, and procurement to the manufacturing of products and services, may potentially affect human rights and we are aware of the importance of putting ourselves in the shoes of those involved.

The EXEDY Group will give the utmost consideration to ensuring that we do not infringe the human rights of others and respond appropriately to correct any negative impact that our business activities may have on human rights. Also, the EXEDY Group recognizes all its business connections as valued business partners. If the actions of any of the EXEDY Group's business partners or other related parties lead to a negative impact on human rights, then the EXEDY Group will take appropriate action and press the relevant party to stop infringing those human rights.

The EXEDY Group will respect internationally recognized human rights (including freedom of association and the right to collective bargaining, elimination of child and forced labor, as well as discrimination in employment and occupation) as provided for in the following international human rights standards: 'Universal Declaration of Human Rights', 'International Covenant on Civil and Political Rights', 'International Covenant on Economic, Social and Cultural Rights', and 'International Labour Organization Declaration on Fundamental Principles and Rights at Work', 'Children's Rights and Business Principles' and 'United Nations Guiding Principles on Business and Human Rights' and strive to practice them. Also, the EXEDY Group will ensure full compliance with all applicable laws and regulations of each country where we conduct business. To the extent there is a difference between the internationally recognized human rights standards and laws and regulations of a country or region, we will pursue a way of respecting the international human rights principles to the greatest extent possible while complying with local law.

2. Scope of Application

This policy applies to all executive members and employees (including semi-regular employees, contract employees, technical trainees, etc.) of the EXEDY Group (EXEDY Corporation and its consolidated subsidiaries). Furthermore, we expect all our business partners, including suppliers, to understand and support this policy.

3. Human Rights Due Diligence

To fulfill the EXEDY Group’s responsibility for respecting human rights, the EXEDY Group will establish a human rights due diligence system. Based on principles in the United Nations Guiding Principles on Business and Human Rights, this system will strive to identify, prevent, and reduce negative impacts related to the EXEDY Group’s business activities.

4. Correction Steps and Consultation Service

If the EXEDY Group learns that it caused or aggravated a negative impact on human rights, the EXEDY Group takes corrective steps through appropriate means. Also, we provide a consultation service that is accessible by affected parties under such conditions. The EXEDY Group will not treat whistleblowing stakeholders unfavorably in any way.

5. Education and Enrooting

To ensure the effectiveness of this policy, the EXEDY Group will conduct appropriate educational and awareness-raising activities targeted at all executive members and employees. Also, to properly implement this policy throughout our business activities, we will incorporate it into related policies and necessary procedures.

6. Monitoring and Information Disclosure

The EXEDY Group will continue monitoring compliance with the Human Rights Policy and improving the situation as necessary. Through the EXEDY Group official website, integrated report, and other communication tools, we will periodically disclose the status of initiatives toward instilling this Human Rights Policy and promoting respect for human rights.

7. Dialogue and Discussion with Stakeholders

The EXEDY Group will secure opportunities to dialogue with related stakeholders, promoting sincere discussion while consulting experts outside the Group to respond to actual or potential negative impacts on human rights. The term "stakeholders" refers to all people and organizations involved in corporate business activities, including customers, shareholders, investors, cooperating companies, local communities, and employees.

June 28, 2022
Tetsuya Yoshinaga
President & CEO

Initiatives

Human Rights Due Diligence

In FY2023, as in FY2022, we have made prohibiting forced labor a top priority issue. We have identified“"foreign technical training" and "migrant workers" as risks of forced labor in Japan in light of the increasing movement around the world to protect the rights of migrant workers, such as the Modern Slavery Act, the growing public concern in Japan over foreign technical trainees, and the recognition of the challenge by our shareholders, customers, etc.

Actual conditions of acceptance for foreign technical intern training

Regarding the acceptance status of technical intern trainees under the organization-supervised model in Japan, we conducted both voluntary and on-site audits in FY2022 at three group sites that accept technical intern trainees under this model. The audits did not reveal any violations leading to human rights abuses; however, it was confirmed that the personal expenses borne by individuals from certain countries to come to Japan were high relative to the local cost of living in their home countries. Although within local regulatory limits, these high expenses, coupled with recent yen depreciation, pose a risk of debt bondage. Therefore, we are working with supervising organizations and our group companies to consider switching to countries of origin where the personal expense burden is lower. Additionally, we will continue to conduct ongoing investigations at sites accepting trainees in FY2023.

Migrant labor survey

In FY2023, we conducted a migrant labor survey of 27 overseas Group companies to identify risks that could constitute forced labor. As a result of the investigation, we confirmed that there are no risks related to the hiring process employment conditions.

Understanding the actual situation in relation to human rights risks in general

To confirm awareness of human rights in the Group and our supply chain, the level of responses, issues, etc., we began conducting human rights self-checks at Group companies in Japan and overseas in FY2023. As a result, (1) bases where management systems had not yet been established were instructed to establish them, and (2) the rules were disseminated throughout the Group.
We will continue to conduct regular monitoring.

Education

In FY2022, we conducted human rights training for 3,032 employees (including directors, associate employees, contract employees, and technical interns) with the aim of deepening their understanding of initiatives to respect human rights.The training will cover topics such as society's and our company's efforts to respect human rights, risks of harassment and other human right s violations that need to be recognized, and human rights due diligence. The training is conducted online so that trainees can take the course at their convenience, and a comprehension test is given afterward to ensure an unders tanding of the training content.
The scope of this program was expanded in FY2023 to cover 38 Group companies in Japan and overseas (11 in Japan and 27 overseas).

Consultation Service

We have established a consultation and reporting desk for human rights issues for the entire Group. In addition, we have established the "EXEDY Hotline," a counter where employees can consult and report directly to outside attorneys, to prevent and detect human rights issuesas well as other issues at an early stage.
To ensure that all employees are aware of this, we specify the Consultation Desk in the EXEDY Code of Conduct, which is distributed to all group members, to raise awareness of our commitment toward respect for human rights.
Furthermore, we clearly state that we will protect the privacy of the person consulting or reporting and that we will not take any disadvantageous action because the person consulted or reported.

Expansion into the supply chain

Regarding efforts to respect human rights, we have expanded the CSR Guidelines for Cooperating Companies to our suppliers in Japan and overseas and have requested their compliance with the guidelines through procurement policy briefings. We also evaluate our suppliers on the status of their compliance with the guidelines and provide feedback on the results.

Payment of wages

We comply with the laws and regulations of each country in which we pay wages and set amounts exceeding those specified in each country and region, by industry sector, etc., to guarantee a living wage.
In addition, based on the concept of equal pay for equal work, we carry out effective management to prevent unreasonable disparities between non-regular and regular employees.
We also ask our suppliers to comply with the applicable laws and regulations of each country in our CSR Guidelines.