13-Oct-2017

To our stakeholders:

I am pleased to confirm that Yokohama Rubber co., Ltd. reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Tadanobu Nagumo
Chairman and Representative Member of the Board

Yokohama Rubber Group Action Guidelines：
We shall respect human rights inside and outside the company
Basic stance of the Yokohama Rubber Group
We shall respect human rights, and shall not practice or be a party to discrimination or harassment.
To practice our basic stance — our action
With an awareness of the diversity of the people working for us, we shall refrain from any action grounded in discrimination for reason of race, ethnicity, nationality, religion, sex, or other attributes. In addition, when we notice any such action, we shall resolutely point it out and urge its correction.
We shall refrain from harassment in any shape or form.
We shall not permit any violent behavior in the workplace.

Vision for FY 2017：
We will respect human rights both inside and outside of the company, and respond sincerely to complaints concerning human rights and make improvements to ensure that there is no child labor or forced labor at the Group or our suppliers.

In response to the target of “zero child labor at the Group, primary suppliers, and plantations for natural rubber that is directly or indirectly purchased by the Group,” we believe that an issue going forward will be continuing to conduct visiting audits to ensure that self-diagnosis is being conducted correctly. Beginning in 2015, we have developed a human rights due diligence framework, and we will also develop a framework for visiting audits as we expand the implementation scope to include the supply chain.
In the natural rubber supply chain, we have completed surveys on primary suppliers, and going forward we will gain an understanding of the current situation and study improvement measures for upstream producers including plantations while also considering third parties with the cooperation of NGOs in production areas by 2017.

During fiscal 2015, we established a human rights due diligence framework at one domestic business location and at one business location for each area overseas, and conducted a test run.
During fiscal 2016, we covered human rights due diligence in CSR workshops, and requested the subsidiaries, suppliers, etc. of suppliers to make efforts to prevent and rectify human rights and labor issues within the scope of their influence.
In fiscal 2017, we will implement human rights due diligence frameworks at suppliers with high human rights risks.

Yokohama Rubber Group Action Guidelines:
We shall create workplaces that are safe and healthy
Basic Stance of the Yokohama Rubber Group
We shall not tolerate child labor or compulsory labor at any of our member companies or suppliers.
We shall respect the rules governing working hours, days off, leave/vacations, minimum wage, and other factors as defined by laws and regulations in host countries and regions (i.e., those where we do business).
We shall place top priority on assurance of safety and health in the workplace, and strive to prevent accidents and disasters.
We shall aim for the growth of all members of the Yokohama Rubber Group through their work, and proactively support their career and capacity development.
We shall confer with worker representatives in good faith in order to build and maintain sound labor-management relations.
To practice our basic stance — our action
We shall be on guard against the supply of labor by children who have not yet reached the employable age prescribed in the laws and regulations of the host countries, not only at member companies of the Yokohama Rubber Group but also at our suppliers.
In the realization that all labor must be supplied voluntarily and that all workers may freely quit their jobs, we shall be on guard against the compulsory or forced supply of any labor.
In order to build workplaces in which safety and health are assured, we shall proactively participate in activities aimed at the improvement and penetration of rules and setups for safety and health.
We shall obey rules governing safety and health in the workplace and show concern for a good work-life balance.
In the event of disasters, we shall respond properly, in accordance with the prescribed rules.
We shall help employees with problems on the job to deal with them in cooperation with concerned personnel instead of treating them as personal worries or difficulties to be handled by those employees alone.
People who are under the influence of alcohol or drugs shall not be permitted to enter the workplace.

Vision for FY 2017:
Become an organization where diverse human resources can perform to the fullest regardless of age, gender, nationality, etc.
We will establish a safety culture aiming for zero risks by promoting both physical and mental health.

There are still scattered chronic issues at older facilities, etc., and we are constantly committed to addressing these issues. In addition, we will strengthen initiatives addressing mental health, which has become increasingly important in recent years.

In education at Group companies in Japan and overseas, we will continually improve development structures for the sentiment, capabilities, and skills required for business and development programs for creating high-performance human resources based on the development of young employees.

With the provision of pay during nursing care leave and it becoming possible to acquire nursing care leave in hourly units, we have established a framework that makes it easy to work while providing nursing care for family members. Going forward, we will promote the creation of environments that make it easy to work while providing child care and nursing care, and also work actively in activities such as the operations of Yokohama Peer Support Co., Ltd. for the employment of people with disabilities, as we strive to create a workplace so that all of our diversified personnel can perform to the fullest.

“Women’s Participation and Advancement in the Workplace Promotion Task” activities

In response to the enactment of the Act on Promotion of Women's Participation and Advancement in the Workplace, Yokohama Rubber launched the “Women’s Participation and Advancement in the Workplace Promotion Task” initiative in October 2016, with 7 female employees participating. The following activities have been implemented with the aim of clarifying the concerns and issues facing female employees now and in the future, and of determining the types of measures that the company should implement to deal with these.

1.Implementation of an employee questionnaire survey (January 2017)
A questionnaire survey was administered to approximately 1,700 employees, including all female employees, with an 89% return rate.
2.Implementation of discussion meetings with female employees (February–March 2017)
Interviews were held with around 300 female employees (representing approximately 90% of all female employees in the company) in all workplaces, at which female
employees were asked about their work and their working environment, the systems affecting them, and their hopes for the future.
3.Exchange of views with divisional managers
Meetings were held with divisional managers to exchange views, providing an opportunity to gain managers’ insights and advice.

On the basis of the results obtained in these activities, we implemented an analysis of the current situation and examined potential new measures; the strategies outlined below were formulated.
In the future, we will be implementing the preparatory work needed to strengthen awareness and to put in place and revise the systems needed to realize the intended reforms.

Basic strategy (provisional)
“Positioning ourselves as a company that welcomes diverse workstyles and that people will want to continue working at over the long term”
1.An enjoyable place to work:
Making it possible for employees to utilize their time efficiently for different purposes
Reforming workstyles, and creating new positions that are attractive to women
2.Coordination:
Helping employees to help each other
Fostering the growth of a corporate culture in which people receive the help they need to stay in their jobs even when their life circumstances change
3.Helping employees to fulfil their potential:
Enabling every individual employee to maximize their potential, regardless of gender
Assigning roles in ways that make effective use of individuals’ strengths, and allow each employee to develop their own career path

Yokohama Rubber Group Action Guidelines
We shall harmonize our activities with the global environment
Basic Stance of the Yokohama Rubber Group
As members of a corporate group with the highest levels of contribution to the environment, we shall take up the challenge of environment-related issues and help to build a sustainable society.
We shall construct and operate mechanisms for companywide management in order to observe environmental laws and regulations in each host country and region.
To practice our basic stance — our action
We shall observe all laws and regulations for prevention of air pollution, water pollution, soil contamination, etc.
In accordance with laws and regulations, we shall control environment-burdening substances, strive to reduce environmental risks deriving from them, and exclude prohibited chemical substances from our product manufacturing processes.
In all stages of our business activities, we shall eliminate the waste of resources and energy, and reduce emissions of CO2 and other greenhouse gases.
In all stages of our business activities, we shall promote the reduction of industrial waste derivation and final disposal volumes.
In order to preserve biodiversity, we shall engage in various activities in accordance with our Guidelines on Biodiversity.

Vision for FY 2017
We will turn all our products into environmentally friendly ones.
25% reduction in GHG emissions at plants in Japan and the Head Office (compared to emissions in 2009)
We will achieve and maintain total zero-emissions in both in our domestic and overseas production bases.
We will promote the effective use of water resources in line with the characteristics of water risks.
We will implement biodiversity preservation activities at domestic and overseas production bases (7 locations in Japan, 7 locations overseas).
500,000 trees have been planted in the YOKOHAMA Forever Forest Project
Conduct surveys on suppliers with 80% of natural rubber procured through CSR procurement.

Measures for vision achievement

We will implement the following measures aimed at promoting the appropriate use and reduction of energy throughout overall business activities.
Promotion of a modal shift in logistics
Management of energy in production
We will promote the effective use of energy through system improvements, savings improvements, process improvements, the development of management systems, the introduction of production systems, and the introduction of new energy (renewable energy) in the production process.
The Yokohama Group will establish seven energy-saving subcommittees under the supervision of the Global Warming Countermeasures Committee, and will promote energy reduction activities.
We will promote the development and sales of eco-products in order to reduce the amount of energy use when products are used.

We expect to achieve our targets for reductions in total energy use as we will continue to expand the introduction of cogeneration systems.
With the aim of increasing the renewable energy usage ratio, we plan to adopt solar power generation, etc. at locations such as Europe and North America in order to increase the percentage of our business locations that use renewable energy.

Yokohama Rubber Group Action Guidelines
We shall conduct corporate activities with a high transparency and practice proper disclosure of information.
Basic stance of the Yokohama Rubber Group
We shall conduct corporate activities with a high degree of transparency, in keeping with our Corporate Philosophy.
We shall make effective use of our corporate assets and heighten our corporate value.
We shall make systemic arrangements for ever-vigilant monitoring of risks surrounding the Yokohama Rubber Group, deal promptly with such risks, and constantly review these arrangements.
We shall establish standards for business processing and see that they are rigorously applied for correct performance of such processing.
We shall practice timely and appropriate disclosure of information on our business result, financial position, and business activities to our stakeholders, and engage in open and fair communication with them.
To practice our basic stance – our action
We shall treasure the tangible and intangible assets of the Yokohama Rubber Group including our reputation and brand, and strive to heighten our corporate value.
We shall exclude any and all ties with anti-social forces.
We shall be on guard against risks in our midst that could lead to disasters, scandals, and accidents, and deal promptly and appropriately with any related occurrences.
We shall obtain personal information on our customers, third parties, our employees, and other persons as well as confidential information on our customers and third parties, only by legitimate methods. In addition, we shall strictly manage any such information, utilize it in a proper scope, and carefully protect.
We shall properly manage export in accordance with the laws and regulations in the host countries and regions.
We realize that the pool of information acquired through our work includes some important undisclosed information otherwise known internally or only within the other organization. We shall properly manage all such information. We shall not engage in any buying or selling of stock etc. using such inside information.

The Corporate Compliance Hotline refers to the system to accept even anonymous whistle-blowing in accordance with Whistle-Blower Protection Act. The telephone number and email address is stated on the Corporate Compliance Card that is distributed to all domestic Yokohama Rubber Group’s employees. There are two hotlines, an internal hotline and an external hotline. As the external hotline has been established at an external law firm, independence has been secured for this hotline. The General Counseling Room is the contact point where all members can utilize as to any doubt or anxieties at work related to corporate compliance, and requires name registration as a general rule. In fiscal 2016, we received a total of 87 cases of questions and concerns for items to confirm or seeking advice, consisting of 47 items through the hotline and 40 items through the General Counseling Room.

Education and Awareness Raising Activities

Using internal compliance issues as themes, we offer both general compliance materials that we would like all employees to know about as well as contents for specific departments and positions, with teaching methods that range from the distribution of educational materials, group learning at work, and group education. During fiscal 2016, we focused on the Antimonopoly Act and compliance education for executives and regular employees who have received an unofficial announcement of overseas assignment.

Privacy policy for employees

We strictly manage employees’ personal information by obtaining prior consent by quoting the purpose of its usage. We understand the importance of employees’ personal information and ensure its proper treatment; we also let our employees know through our internal intranet that we continue to take measures to protect their personal information.