Honda Green Purchasing Guidelines

July 2011 Honda Motor Co., Ltd.

Table of Contents

I. Introduction

Honda’s Environmental Statement ···············································3

Honda’s Environmental Initiatives Takanobu Ito, President and CEO/Chairman, Honda World Environmental Committee·····················································5

Revising the Honda Green Purchasing Guidelines Masaya Yamashita, Managing Director/COO for Purchasing Operations ············································································6

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II. Honda Green Purchasing Policy ················································7 Environmental Management ···················································· 9

Corporate Activities ································································ 10

Product (Parts and Materials)

Product Fuel Economy ··················································· 11

Chemical Substance Management ································· 12

Document Revision History ························································ 13

Publisher and Contact for Inquiries ············································ 14

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I. Introduction Honda Environment Statement Since our founding, Honda has based our corporate activities on a fundamental belief of Respect for the Individual. Since the mid-1980s, a variety of environmental problems have become increasingly evident around the world, and thus, require responses and countermeasures on a global scale. Even before such issues came to the forefront, since the days of the so-called pollution problem, Honda has taken initiatives to tackle environmental questions in line with its fundamental belief. In 1992, Honda issued the Honda Environmental Statement, clearly expressing environmental targets and directions for the company. Under this Statement, Honda has continued addressing environmental preservation as one of the most important themes in its general corporate activities. As well as creating in the development process products with excellent environmental performance, we have carried out advanced environmental initiatives in all aspects of our corporate activities, including purchasing, production, administration, transportation, sales and recycling.

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Honda Environment Statement As a responsible member of society whose task lies in the preservation of the global environment, the company will make every effort to contribute to human health and the preservation of the global environment in each phase of its corporate activity. Only in this way will we be able to count on a successful future not only for our company, but for the entire world. We should pursue our daily business interests under the following principles:

1. We will make efforts to recycle materials and conserve resources and energy at every stage of our products’ life cycle from research, design, production and sales, to services and disposal. 2. We will make every effort to minimize and find appropriate methods to dispose of waste and contaminants that are produced through the use of our products, and in every stage of the life cycle of these products. 3. As both a member of the company and of society, each associate will focus on the importance of making efforts to preserve human health and the global environment, and will do his or her part to ensure that the company as a whole acts responsibly. 4. We will consider the influence that our corporate activities have on the local environment and society, and endeavor to improve the social standing of the company. (Established and announced in June 1992)

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Honda’s Environmental Initiatives In our vision of corporate activities toward the year 2020, Honda has established that the basic direction for the next ten years will be to create products that maximize the joy of our customers, with speed, affordability and low CO2 emissions. Sharing joys with our customers, while striving to be a company that society wants to exist, has been one of our corporate beliefs since the days of our founding. To this end, we will continue to offer new value to customers worldwide with products and technologies that exceed expectations, from a global viewpoint, so that we can move toward achieving our vision of a sustainable mobile society in the future. In our view, the ideal way to reduce the environmental footprint is to promote widespread use of products that have minimal impact on the environment, Honda will also focus on corporate activities which will reduce the environmental footprint. In our motorcycle business, the Super Cub, first launched in 1958, has continued to evolve over the past fifty years, winning the hearts of customers around the world. Leading with the global launch of the PCX, equipped with fuel injection and idle stop systems, and the launch of the EV-neo electric scooter, we press on with our initiatives to reduce our global environmental footprint. In the automobile sector, we are aiming for further progress with our compact and lightweight IMA hybrid system, with other hybrid technologies, and with the internal combustion engine itself, to promote more widespread use of vehicles with better fuel economy. We will also keep moving forward with the development of electric vehicles, using more environmentally friendly alternative energy sources such as fuel cells and batteries. In addition to our solar cells and cogeneration systems, we are also developing hydrogen stations, making use of sustainable energy technologies. Our vision is to supply energy to various modes of transportation and homes through such stations and to network these stations in the future. For a company to ensure its continued existence, it must make environmental issues its top priority, in particular the problems associated with global warming. With Honda’s corporate activities expanding and evolving on a global scale, we are committed to the company-wide challenge of reducing CO2 emission levels. We are making every effort toward the realization of a low-carbon society by offering customers everywhere products with extremely low CO2 emissions and fuel consumption. Takanobu Ito President and CEO Chairman, Honda World Environmental Committee

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Revising the Honda Green Purchasing Guidelines We at Honda consider measures for dealing with global environmental issues to be very important challenges in business management, and have, over the years, actively promoted these measures together with our business partners. To better respond to further increases in the demands of the general public for even more rigorous environmental measures, we have conducted a major review of the Honda Green Purchasing Guidelines originally published in 2001. Given the ongoing global expansion of Honda’s corporate activities and of our part procurement supply chains, we consider it to be our responsibility to society and to our customers to take on the challenge of global initiatives to reduce our environmental footprint. The recent increase in consumer awareness about environmentally friendly products is quite remarkable, making it clear that we now live in an era where the companies supplying these products are evaluated based on their commitment to tackling environmental issues. To effectively respond to the public’s ever-increasing and ever-changing expectations and demands, we believe we need to join forces with the business partners supplying many of the materials and parts for Honda products, so that we can ensure prompt global responses. Toward this goal, Honda has added E (Environment) to our QCDD evaluation categories and we intend to strengthen our relationships with the business partners supporting our activities to reduce global environmental footprints, such as greenhouse gas emissions, from the viewpoint of the product (parts and materials) life cycle. We also intend to share these guidelines with our partners in each region of the world so that we can consistently offer customers worldwide products with minimal environmental footprint. Pushing forward our corporate activities through our supply chain will also minimize our environmental footprint. We would therefore ask all of our partners to actively take the necessary measures to follow these guidelines. Masaya Yamashita Managing Director COO for Purchasing Operations

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II. Honda Green Purchasing Policy For Honda, activities to conserve the global environment establish an important pillar in our corporate policies. Our goal is to reduce our environmental footprint over the entire life cycle of our products, from product development to purchasing, production, administration, transportation, and to sales and recycling. To carry out these activities effectively, we are continuing to take strong measures to reduce our environmental footprint in each area, together with our suppliers. We are also adding E (Environment) to our supplier evaluation categories (*1) of Q (Quality), C (Cost), D (Delivery) and D (Development) to allow us to more actively encourage purchasing environmentally friendly parts and materials. Below is a list of the individual areas in Honda green purchasing activities. y Environmental management activities to ensure environmental control for products (parts and materials) and corporate activities y Corporate activities (*2) to supply these products (parts and materials) (Development, Purchasing, Production, Administration, Transportation, Sales, Recycling) y Products (parts and materials, etc.) purchased by Honda Collectively, these are referred to as the areas of our environmental activities.

For each area, the overall purchasing activities of sharing policies with suppliers and achieving targets together are called Honda green purchasing activities. (*1)

The results of activities at each supplier in response to these guidelines may be evaluated.

(*2)

Corporate activities cover all activities related to Honda products (including not only first-tier but also sub-tier suppliers).

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Environmental Management To promote a wide range of environmental activities, we ask each supplier to not only ensure compliance with the laws and ordinances of each country and region, but also to establish an effective structure for environmental management in all areas of the company’s corporate activities and to continuously apply and improve this structure. Specific activities y Establishment of an environmental management structure for each company, factory or office We encourage each supplier to establish an environmental management structure conforming to ISO14001, or other certification systems approved by third-party certification organizations, and actively obtain certifications, and actively obtain certifications. y Establishment of an environmental management structure focused on business areas and products We encourage suppliers to establish an environmental management structure from the viewpoint of the product (parts and materials) life cycle, by reinforcing coordination focused on each business area among the management structures of individual companies, factories and offices. This should include providing guidance to second-tier and sub-tier suppliers on how to establish an effective environmental management structure).

In some cases, we may need to view or have suppliers submit related documents and data. 9

Corporate Activities We would like each company to promote environmental activities to reduce greenhouse gas emissions in all areas of corporate activity, reduce the amount of water used, reduce the amount of waste generated, properly manage chemical substances, and prevent air, water and soil pollution, among other measures. In particular, to ensure that greenhouse gas emissions are controlled, each supplier is asked to carry out the activities specified below. Specific activities y Grasp of greenhouse gas emissions We ask that suppliers establish a structure for collecting, calculating and reporting data, which can be done using methods specified by Honda, and this data is managed in ways that are compatible with these methods. We may request that suppliers submit this data to Honda. y Reduction in greenhouse gas emissions We would like to ask each supplier to promote activities to reduce greenhouse gas emissions by ensuring more effective use of energy and through other measures. We will share specific targets with targeted suppliers in explanatory meetings and in other ways. We will request that targeted suppliers submit the relevant data for specific reduction plans and results achieved. In some cases, we may need to view related documents. We may also request that suppliers submit data on environmental activities other than those focused on reducing greenhouse gas emissions.

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Product (Parts and Materials) Product fuel economy For the products (parts and materials) provided by each supplier, we ask that suppliers continue suggesting the best possible cost, quality, performance and functions during the planning and R&D processes. In collaboration with Honda, also proactively present proposals focusing on environmental issues and the viewpoint of achieving weight reduction, lower resistance and power conservation, among other things, to allow us to offer even more environmentally friendly products to our customers. Specific activities y Suggestions for products (parts and materials) We ask that suppliers present proposals for specifications from the viewpoint of achieving weight reduction, lower resistance and power conservation, among other things, at product development events specified by Honda. We will explain in greater detail with targeted suppliers at explanatory meetings and in other ways.

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Chemical Substance Management With supply chains becoming more complex across national borders, managing chemical substances in products now entails thorough management of operations between first- and second -tier suppliers between second and third-tier suppliers, and to the end of the supply chains. Each supplier must ensure, through their supply chains, the management of chemical substances, and guarantee that parts and materials do not contain any chemical substances prohibited under the laws and regulations. Specific activities y Management We ask that you establish a structure within your company to assure compliance with the Honda Chemical Substance Management Standard, and manage chemical substances accordingly. We also ask that each supplier submit a conformity declaration concerning the Honda Chemical Substance Management Standard. y Guarantee We ask that you enter data for chemicals contained in products (parts and materials) into a system specified by Honda. (Applicable products (parts and materials) will be specified by Honda.)

We will explain in greater detail with targeted suppliers at explanatory meetings and in other ways. .

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Document revision history

December 2001

Establishment of guidelines Newly issued

July 2002

Revision SOC guidelines revised

January 2011

Major revision Measures added for reinforcing control of greenhouse gas emissions

July 2011

Revision New environmental symbol adopted

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Publisher and Contact for Inquiries Publisher Purchasing Planning Office, Purchasing Operations Honda Motor Co., Ltd. Inquiries Purchasing Planning Block, Purchasing

Japan

Planning Office, Purchasing Operations Honda Motor Co., Ltd. Tel: +81

(0)28-677-7033

Supply Chain Sustainability Unit

North America

North American Purchasing Division Honda of America Mfg., Inc. Email:

[email protected]

Compras

South America

Honda Automoveis do Brasil Ltda. Tel:

+55 (0)19-3864-4309

Environmental Regulatory Compliance

Europe

Supplier Quality Development Division Honda of the UK Manufacturing Ltd. Tel:

+44 (0)1793-834623

Planning & Administration Dept. Regional Purchasing Planning Bloc,

Asia & Oceania

Automobile Purchasing Division Asian Honda Motor Co., Ltd. Tel:

+66 2508-5680 (ext. 1219)

Purchasing

China

Honda Motor (China) Investment Co., Ltd. Shanghai Branch Office TEL : +86

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(0)20-3206-6552