Combined ESG Databook (PDF:4.3MB)

Nippon Paper Group

Nippon Paper Group ESG Databook 2021

The Nippon Paper Group issues ESG Databook to provide stakeholders with a broad overview of its efforts to meet its corporate social responsibilities (CSR). The Group also publishes an integrated report to communicate about our long-term value creation.

Our CSR disclosure has been prepared in accordance with the GRI Standards: Core option.

Period Covered

Fiscal 2020: April 1, 2020-March 31, 2021

Includes information from before April 1, 2020 and after March 31, 2021. Dates are indicated in such cases.

Scope of Organizations Covered

The reporting entity is Nippon Paper Industries Co., Ltd. Data, however, were compiled as of March 31, 2021 for Nippon Paper Industries Co., Ltd. and all 54 of its consolidated subsidiaries.

Scope of Environmental Coverage

The scope of the report covers the basic environmental policies, systems, environmental accounting and environment performance and other data for the 15 companies, including 2 non-consolidated subsidiaries with production facilities, named below. All major production locations are included.

Consolidated: Nippon Paper Industries Co., Ltd.; Nippon Paper Crecia Co., Ltd.; Nippon Paper Papylia Co., Ltd.; Opal Co., Ltd.; Jujo Thermal Oy; Siam Nippon Industrial Paper Co., Ltd.; Nippon Seitai Corporation; N&E Co., Ltd.; Daishowa Uniboard Co., Ltd..; Nippon Paper Development Co., Ltd.; GAC CO., LTD.; Amapá Florestal e Celulose S.A.; Nippon Dynawave Packaging Co.

*1 Paper Australia Pty Ltd.; Maryvale Mill.

*2 Partially referred to as AMCEL in this report

(The contribution to total consolidated sales of the companies listed here was 89%.)

(Sales data for trading companies that are members of the Nippon Paper Group and sell products made by the Group to outside buyers are included.)

Non-consolidated: Nippon Paper Liquid Package Product Co., Ltd. and Akita Jujo Chemicals Co., Ltd.

Referenced Guidelines

• Environmental Reporting Guidelines (2018) of the
  Ministry of the Environment
• Sustainability Reporting Standards issued by the Global Reporting Initiative (GRI)
• United Nations Global Compact
• SASB sustainability accounting standards
• ISO 26000, etc.

*Guideline comparison table https://www.nipponpapergroup.com/english/csr/gri/

Management Responsibility..............................01

Forest Management and Raw Material Procurement Responsibility....14

Environmental Responsibility...........................24

Responsibility to Customers.............................56

Human Rights, Employment and Labor Responsibility....68

Responsibility to Communities.........................83

Other Data...........................................................85

Disclaimer

This report includes not only statements of fact and historical data but also plans, forecasts and estimates(forward-looking statements) based on the business plans and policies of the Nippon Paper Group. These forward-looking statements are the result of assumptions or judgments based on currently available information as this report was prepared. It should be noted that forward-looking statements may differ significantly from actual results due to the impacts of a number of important factors.

Nippon Paper Industries Co., Ltd.

Head Office:

4-6 Kanda Surugadai, Chiyoda-ku,

Tokyo 101-0062 (Ochanomizu Sola City), Japan

Contact information:

Sustainability Management Promotion Department TEL: [phone] FAX: [phone]

Publication date September 2021

（ Previous issue September 2020 ）

Next issue scheduled September 2022

website https://www.nipponpapergroup.com/csr/

Management Responsibility

Sustainability Management

Basic Stance

Nippon Paper Industries signed and joined the UN Global Compact in 2004. The Company promotes sustainability management that pursues both social and environmental sustainability and the future growth of the Company by realizing the Group Mission and enhancing activities to fulfill its corporate social responsibility based on the Ten Principles of the UN Global Compact in four areas (human rights, labor, environment, and anti-corruption).

Under the 2030VISION formulated in May 2021, the Company clearly states that it will promote sustainability management as a comprehensive biomass company shaping the future with trees.

2030Vision

https://www.nipponpapergroup.com/english/ir/NPI_Medium-Term%20Business%20Plan%202025_english.pdf

Promotion Structure

The Company formulated an Environmental Charter in 1993 to take a long-term standpoint on addressing circulation of resources and environmental preservation. The Company established a CSR committee in 2003 and used this as a basis to promote building a management framework to fulfill its corporate social responsibilities and has established principles and basic policies related to raw material procurement, the environment, product safety, human rights, employment and labor, safety and disaster prevention and contributions to society. The Company established a new CSR Division in 2008 leading to stronger CSR management.

Currently, the CSR Division, which reports directly to the president of the Company, includes the Sustainability Management Department, Risk Management Department, Compliance Office, and Public Relations Office, and is engaged in responding to ESG issues, promoting risk management and disclosing appropriate information toward realizing the Vision within the Group Mission.

TheBoardof Directors of NipponPaper Industries Co.,Ltd.

CSR Division

Report

Oversight

President

Sustainability Management Department

General Manager of CSR Division

Risk Management Department

Compliance Office

Public Relations Office

Cooperate

Cooperate

Departments in charge of business execution

Group companies

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Management Responsibility

Corporate Governance

Basic Stance

As the holding company of the Nippon Paper Group, Nippon Paper Industries established its Corporate Governance Policy in November 2015 as a guideline for the Company's basic approach to management and control of the group, so as to achieve sustainable growth and enhance corporate value over the medium to long term in line with its corporate mission.

The Company's highest management priority is to further enhance management transparency to shareholders and other stakeholders, and to realize fair management.

The Company has adopted an executive officer system and is working to strengthen the oversight function of its Board of Directors to ensure the separation of business execution and management oversight. The Company is implementing growth strategies, monitoring businesses under its control, and promoting compliance.

Corporate Governance Policy

https://www.nipponpapergroup.com/english/ir/governance/governance_policy/E-CGP_20200515.pdf

Corporate Governance Report

https://www.nipponpapergroup.com/english/ir/governance/

Initiatives for Strengthening Corporate Governance

FY2006 ● Formulated the Basic Policy for Establishing the Internal Control System ● Shortened director terms to one year from two

FY2013 ● Adopted an executive officer system

● Began appointing independent outside directors FY2015 ● Established the Corporate Governance Policy

• Began evaluating the effectiveness of the Board of Directors

FY2016 ● Established the Personnel & Remuneration Advisory Committee ● Increased the number of independent outside directors to two

FY2019 ● Increased the number of independent outside directors to three

● Appointed one female outside director and one female outside Audit & Supervisory Board member

● Ensured the Personnel & Remuneration Advisory Committee consists mainly of outside directors

• Introduced the Board Benefit Trust as a stock compensation system

FY2020 ● Revised part of the Corporate Governance Policy concerning the policy for determining director remuneration

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Management Responsibility

Corporate Governance Structure

Corporate Governance Structure (As of July 1, 2021)

General Meeting of Shareholders

Appoint

Cooperate

Appoint

Cooperate

Appoint

Audit

Audit & Supervisory Board Members

Board of Directors

Audit

Accounting Auditors

(4 Audit & Supervisory Board members,

(9 directors, including 3 outside directors)

including 2 outside members)

Oversight

Personnel & Remuneration Advisory Committee

Cooperate

Representative Directors

Cooperate

Management Executive Committee

Group Management Strategy Committee

ManagementAudit Office

Cooperate

CSR Division

Risk Management Department

Compliance

Office

CooperateCorporate Lawyer

Nippon Paper Group Audit & Supervisory

Monitoring

Cooperate

BoardMembers Liaison Committee

(audit/oversight)

Departments in charge of business execution, Group companies

Type of Organization

Chairman of the Board of Directors

Number of Directors

Number of Audit & Supervisory Board Members

Number of Appointed Independent Officers

Board of Directors Meetings

Held in FY2020

Audit & Supervisory Board

Members Meetings Held in FY2020

Independent Accounting Auditor

Company with Audit & Supervisory Board Members Chairman and Director: Fumio Manoshiro

9 (including 3 outside directors)

4 (including 2 outside Audit & Supervisory Board members)

5 (including 3 outside directors and 2 outside Audit & Supervisory Board members)

Number of meetings: 13

Average rate of attendance by directors: 100.0% (outside directors: 100.0%)

Average rate of attendance by Audit & Supervisory Board members: 98.1%

Number of meetings: 14

Average rate of attendance by Audit & Supervisory Board members: 100.0%

Ernst & Young ShinNihon LLC

Director Attendance at Board of Directors Meetings

Position	Name	Attendance in FY2020
Chairman and Director	Fumio Manoshiro	13/13	100%
President and Representative Director	Toru Nozawa	13/13	100%
Executive Vice President and Representative Director	Kazufumi Yamasaki	13/13	100%
Director and Senior Managing Executive Officer	Akihiro Utsumi	13/13	100%
Director and Managing Executive Officer	Takeo Konno	13/13	100%
Director and Executive Officer	Masanobu Iizuka	13/13	100%
Outside Director	Makoto Fujioka	13/13	100%
Outside Director	Yoko Hatta	13/13	100%
Outside Director	Yutaka Kunigo	13/13	100%

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Management Responsibility

■ Board of Directors

• In May 2006, the Company formulated its Basic Policy for Establishing the Internal Control System.
• The role of the Company's Board of Directors is stipulated in the Corporate Governance Policy.
• The Board of Directors of the Company shall bear the supervisory function of management as a whole and make the most appropriate decisions for the Company through deliberations, etc. on the execution of important business issues that are to be decided, under laws, regulations, and the Articles of Incorporation, by the Board of Directors. The Board of Directors shall also supervise the status of the execution of duties by the president and representative director and other corporate officers.
• In view of the importance of environmental and social challenges related to sustainability, the Board of Directors shall raise awareness among officers and employees, strive to facilitate the sustainable development of society, and enhance the corporate value of the Group by promoting active efforts to resolve challenges while giving consideration to stakeholders.
• The Company's Board of Directors is made up of internal directors who have excellent abilities to execute and manage each business in their charge and outside directors who have specialized knowledge and extensive expertise.
• The board achieves a 1/3 ratio of outside directors among the board members. Furthermore, the Company has appointed one female outside director and one female outside member of the Audit & Supervisory Board.

Basic Policy for Establishing the Internal Control System

https://www.nipponpapergroup.com/ir/pdf/internal_control_system/ (Japanese only)

■ Management Executive Committee

• Usually, the Company's Management Executive Committee meets once a week to deliberate on important management-related matters under the authority of the president to assist in the execution of the president's duties.
• Committee membership is basically composed of the president, other directors (excluding outside directors) and general managers who do not serve as directors.
• Meetings of the Management Executive Committee, held once a month, are attended by outside directors and general managers of the Company's mills in order to share information on monthly financial results among management.

■ Group Management Strategy Committee

• The Company's Group Management Strategy Committee meets as necessary.
• The Company's Group Management Strategy Committee deliberates on management strategies by business segment and other important matters related to the Group.
• Committee membership is composed of the Company's management and presidents of major companies of the Nippon Paper Group.

■ Audit & Supervisory Board Members and Audit & Supervisory Board

● The Audit & Supervisory Board members of the Company attend important meetings, such as meetings of the Board of Directors, the Management Executive Committee, and the Management Strategy Committee. In addition to strict monitoring of the execution of business by directors, the auditors also audit whether all company operations are conducted strictly legally and appropriately by means of on-site audits of each division, business site, and company in the Group.

● The Audit & Supervisory Board periodically holds meetings with the representative directors, working to deepen mutual understanding.

● The Audit & Supervisory Board also strives to enhance group audits by strengthening cooperation with auditors of each Group company.

■ Management Audit Office

• The Company's Management Audit Office is directly under the President's control. It conducts an internal audit of the Company, and each Group company, and a comprehensive evaluation of the maintenance and operation of the internal control system as it relates to financial reporting.
• The Management Audit Office also holds monthly information exchange meetings with the Audit & Supervisory Board Members to ensure cooperation between Audit & Supervisory Board Members and internal audits.

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