Denka Group Human Rights Policy

Denka Group Human Rights Policy

The Denka Group (“Denka”) aims to contribute to society by providing innovations and solutions under our Vision, consisting of Core value, Purpose and Mission, as the basis of business activities of all executives and employees of Denka. Denka understands that human rights are important matters in all our business activities. Denka has established this policy to fulfill our responsibility to respect human rights and to contribute to overcome human rights issues in accordance with the "Denka Group ESG Basic Policy" and the "Denka Group Corporate Ethics Policy” and will strive to achieve our objectives as set forth below. 
This policy was approved by the Board of Directors on September 11, 2023.

1. Scope

This policy applies to all executives and employees, including non-regular employees, of Denka.
Furthermore, Denka will encourage all our business partners, including suppliers, to understand this policy.

2. Support for International Norms and Standards

Denka will respect international standards of human rights set forth in (i) the International Bill of Human Rights, consisting of Universal Declaration of Human Rights, International Covenant on Civil and Political Rights, International Covenant on Economic, Social and Cultural Rights, (ii) the International Labor Organization’s (ILO) Declaration on Fundamental Principles and Rights at Work and the fundamental principles established therein regarding "Freedom of Association and the Right to Collective Bargaining", " Elimination of all forms of Forced or Compulsory Labor", "Effective Abolition of Child Labor", "Elimination of Discrimination in Respect of Employment and Occupation", and "Safe and Healthy Working Environment," and (iii) the OECD’s "Guidelines for Multinational Enterprises.” Also, Denka will exert efforts to act in accordance with the United Nations Guiding Principles on Business and Human Rights and will support the Ten Principles of the United Nations Global Compact as a company that has signed the United Nations Global Compact. 
Denka will comply with the laws and regulations applicable in each country and region where we conduct business activities. However, should the laws and regulations of the country or region conflict with international human rights norms, Denka will pursue the methods that maximize respect for internationally recognized human rights principles.

3. Responsibility to Respect Human Rights

Denka will strive to ensure that our business activities do not violate the human rights of any person related to our business. We will not tolerate any form of discrimination based on gender, age, nationality, ethnicity, race, place of origin, religion, belief, disability, sexual orientation, gender identity, and other factors, and treat individuals fairly in all aspects of employment, including recruitment, job placement, and promotion. In the event of any adverse impact caused by our business activities, Denka will fulfill our responsibility to respect human rights by taking appropriate corrective actions.
Denka will not tolerate harassment and discrimination that hurt the dignity of individuals, and any form of child labor and forced labor. In addition to guaranteeing the payment of wages above the minimum wage necessary for a stable livelihood, we will make efforts to establish appropriate wage conditions, such as providing equal pay for equal work, and ensure that wages and benefits are provided without gender-based discrimination. Denka will respect workers' freedom of association and the right to collective bargaining, and will work to prevent excessive working hours, reduce overtime, and create a safe, healthy, and comfortable work environment with fair wages guaranteed. In addition, Denka will strive to provide our customers with safe products and services and to disclose appropriate information.

4. Governance

We will clarify a person who is responsible for overseeing our compliance with this policy and our efforts based on this policy.

Article 5 Implementation of Human Rights Due Diligence

Denka implements human rights due diligence, understands and assesses the business's potential or actual impact on human rights, and strives to prevent or mitigate human rights risks.

6. Remedial Measures

If it becomes clear that Denka has caused adverse human rights impact, we will make efforts to correct and remedy such impacts through appropriate measures. Regarding adverse impacts on human rights that are directly linked to Denka’s business through business relationships, Denka will also make efforts to find a solution to human rights issues in our supply chain by encouraging our business partners to make efforts to correct and remedy such negative impacts.

7. Stakeholder Engagement

Regarding measures to address potential and actual adverse human rights impacts, Denka will exert efforts to take such measures through continuous consultation and engagement with relevant internal and external stakeholders.

8. Grievance Mechanism

Denka will take measures to improve the effectiveness of the correction and remedy of any concerns about human rights by establishing a system to report any concerns about human rights for all executives and employees of Denka, all business partners including suppliers and other stakeholders.

9. Education and Training

For the effective implementation of this policy, Denka will offer training to all officers and employees of Denka, including non-regular employees, to enhance their understandings as to respect for human rights.

Established on September 11, 2023
Revised on March 10, 2025
Ikuo Ishida
President and CEO
Denka Company Ltd.

Denka Group Human Rights Important Risks

Denka has identified significant human rights risks that may arise in the course of corporate activities and is taking appropriate measures in response. In identifying risk items, we conducted hearings with each business division, management division, and labor union in fiscal 2023, and conducted questionnaire surveys targeting domestic factories and offices in fiscal 2024. In fiscal 2025, we will expand the scope of our surveys to 14 group companies in Japan and overseas, and identify priority human rights risk items for the Denka Group as a whole.

In this survey, we conducted a wide-ranging investigation into risk items that should be considered in all business activities as a company, including labor issues, harassment, discrimination, forced labor, child labor, working hours, wage deficiencies, rights of local residents, and consumer safety and right to know. As a result, we recognized that the following are important human rights risks that the Group should prioritize in its efforts.

The Human Rights Working Team will confirm prevention and mitigation measures for the extracted risks and consider and implement corrective and preventive measures. In addition, for items and business sites with higher human rights risks, we will establish a human rights due diligence process across the Group, maintain it, and continue it while considering changes to the survey methods to conduct more in-depth surveys.

Engagement activities with stakeholders

Denka conducts ongoing dialogue and discussions with relevant internal and external stakeholders to identify and address potential and actual human rights issues, as stated in Article 7 of the Denka Group Human Rights Policy.

Establishment of grievance mechanisms Whistle-blowing system

Dialogue with external stakeholders

Denka sends a Self-Assessment Questionnaire (SAQ) based on the 10 Principles of the United Nations Global Compact to all suppliers and requests their responses in order to correctly understand the human rights risks of major suppliers. The SAQ evaluates various risks including human rights risks and lists the results by item. For suppliers that do not meet a certain score, we are proceeding with dialogue and discussions for improvement, and have completed dialogue with 50% of the target suppliers in fiscal year 2025.
In addition, we request that new business partners agree to our Denka Group Sustainable Procurement Guidelines, which state the need to comply with human rights. Furthermore, in fiscal year 2025, we sent letters from Group companies to suppliers to inform them of these Guidelines, achieving a 100% agreement rate. We will continue to engage in dialogue with our business partners.

Supply chain management

Dialogue with internal stakeholders

The Denka Group is raising awareness of the Denka Group Human Rights Policy among all employees and is working on human rights due diligence and human rights remedy mechanisms in collaboration with third parties with specialized knowledge in a planned manner.
When conducting human rights risk surveys, we hold pre-explanatory meetings for employees subject to investigation at our head office, factories, and business sites as well as at labor unions and Group companies, and conduct Q&A sessions and exchanges of opinions. We also conduct discussions on concerns and requests regarding human rights through hearings and questionnaires.
Furthermore, as part of employee training, we hold explanatory meetings on our human rights policy and initiatives, and conduct e-learning linked to compliance training to monitor employee understanding of human rights and connect this to the next actions.

Compliance and Engagement with Human Rights

The "Denka Group Code of Ethics" emphasizes "maintaining good interpersonal relationships" and obligates all Denka Group officers and employees to respect individual human rights. The "Business Code of Conduct" states the importance of Denka Group officers and employees acting as good corporate citizens in all countries and regions where Denka Group operates, while recognizing that laws, customs, traditions, and cultures differ from country to country and region to region, and maintaining a high level of ethical standards. Furthermore, it states the importance of Denka Group officers and employees being treated fairly and without discrimination in all aspects of employment relationships, including job placement, promotion, transfers, and training opportunities, based on the abilities and aptitudes required for their jobs, as well as in accordance with laws and regulations, regardless of ethnicity, race, gender, religion, nationality, age, disability, gender identity, sexual orientation, etc. In addition, the "Business Code of Conduct" clarifies specific obligations and prohibitions that all Denka Group officers and employees must adhere to in order to comply with labor laws, ensure equal employment opportunities and non-discriminatory treatment, and prevent workplace harassment. In particular, our in-house training text on preventing workplace harassment includes specific examples of power harassment, sexual harassment, customer harassment, SOGI harassment, etc., in accordance with the guidelines of the Ministry of Health, Labour and Welfare, and is carefully designed to prevent harassment incidents from occurring within Denka Group.
In addition, Denka signed the United Nations Global Compact in June 2023. Denka supports the 10 principles set forth by this initiative and respects other international norms concerning human rights, and will contribute to addressing human rights issues through its business activities.

Denka Group's Initiatives for Labor Issues

As stated in the Denka Group Human Rights Policy, Denka complies with local laws and regulations of each country in which it conducts business activities, respects internationally recognized human rights principles, and actively works to reduce excessive working hours and overtime hours. Specific measures include the following.

• Prohibiting Child and Forced Labor: As stated in Article 3 of the Denka Group Human Rights Policy, Denka does not allow child labor or forced labor in any form. The Denka Group Employment Regulations also stipulate that such labor is prohibited, and as a preventive measure against the occurrence of such labor, Denka conducts age verification using copies of residence certificates and status of residence cards submitted upon hiring in Japan. Furthermore, to prevent forced labor, the Company does not store important documents held by employees, such as passports, or restrict their freedom of movement.
• Reduction of Long Working Hours: To reduce long working hours, we conduct industrial physician interviews for employees who have worked long hours exceeding a certain number of hours, confirm the situation with the employee's supervisor, and strengthen and promote the use of various paid leave systems.
• Living Wage Support: We pay wages that meet the minimum wage and are at a level that guarantees a basic standard of living in consideration of social trends.

Respect for the Freedom of Association and the Right to Collective Bargaining

Employees of Denka have organized the Denka Labor Union, which has the right to collective bargaining, and hold labor-management consultations three times a year. In addition, three times a year, the President and representatives of the Labor Union have opportunities to engage in dialogue regarding the Company’s management situation and initiatives, and monthly information exchange meetings are also held. The Company places importance on maintaining appropriate relationships with the Labor Union and respects the purpose and philosophy of the Labor Union in order to protect the rights of workers. Furthermore, active discussions are held between labor and management regarding working conditions and the working environment of employees, and efforts are made to improve these conditions. Through these activities, Denka aims to build sound labor-management relationships based on mutual understanding and trust, and realize a comfortable working environment.

Denka Group's Efforts Regarding Children's Rights

The Denka Group is promoting various initiatives in accordance with the "Children's Rights and Business Principles" established by UNICEF, the United Nations Global Compact, and Save the Children.
Our Denka Group Human Rights Policy and Denka Group Basic Sustainable Procurement Policy clearly state our commitment to the elimination of child labor based on Principle 2: Child Labor. Furthermore, regarding Principle 3: Young Workers, Parents, and Caregivers, we are working to create systems and working environments that are easy for employees raising children to work in and that they find rewarding.
Moreover, based on Principle 10: Engagement with the Local Community and Governments, we hold factory tours and chemistry experiment classes for children at elementary, junior high, and high schools in the areas where our factories, offices, and research laboratories are located. In addition, we conduct a wide range of educational support initiatives, including workplace experience programs for high school and technical college students, sponsorship of science and technology contests, and outreach classes at universities on the theme of intellectual property education.
As the Denka Group, we are actively supporting the development of young people who will be responsible for the manufacturing of the future in accordance with our Denka Group Social Contribution Policy, which includes the promotion of education, academia, and culture.

Denka Group Social Contribution Policy