Pilot Corporation of Europe Code of ethics

CEO’S FOREWORD

Dear colleagues, It has been at the heart of our history and it is now at the heart of our strategy: exemplarity and ethics is a matter of trust between Pilot and its stakeholders and it is everyone’s business and responsibility in our group.

I am convinced that how we do business matters at least as much as what we do.

To help you in your daily activity, I, together with Pilot Corporation of Europe’s Executive Committee members, decided to lay down in this Code of Ethics the core principles that must guide our behaviour in all instances.

I count on each of you to make this document yours, abide by it and refer to it whenever you may need to, so as to embark your team as well as your counterparts in this journey.

Together, let’s write our world in respect with ethical principles !

Yoshio WADA

CEO

INTRODUCTION

Why this Code of Ethics?

Founded in 1918, PILOT’s mission is to support the act of writing by developing instruments at the cutting edge of innovation. For over 100 years, PILOT has been committed to designing and manufacturing innovative, quality and eco-designed products.

Proud of our profession, present throughout the world, we are committed to ensuring PILOT’s long-term future by assuming our responsibilities in the face of societal and climatic challenges.

We are convinced that there can be no desirable product without a sustainable society, and we are committed to actively contributing to a better future.

We contribute to this commitment by adopting a CSR approach, by raising awareness among our employees and partners for sustainable business practices, and by continuously improving ourselves.

That is why the Code of Ethics defines the principles and values to which PILOT and all its subsidiaries adhere, and which must guide every PCE’s employee in the day-to-day practice of their profession.

Textual foundations of our Code of Ethics :

• The United Nations Universal Declaration of Human Rights and The European Convention on Human Rights
• Various International Labor Organization in particular conventions 29, 105, 138, 182 (child labor and forced labor), 155, 187 (occupational health and safety), 111 (discrimination), 100 (equal remuneration), 87 and 98 (freedom of association, protection of the right to organize and collective bargaining);
• The OECD Guidelines for Multinational Enterprises
• The United Nations Convention on the Rights of the Child
• The 10 Principles of the United Nations Global Compact and associated Sustainable Development Goals (SDG) (listed below);
• The United Nations Women’s Empowerment Principles

We adhere with the Ten Principles of the United Nations Global Compact listed below (and conventions to which these principles refer):

Human Rights

1. Businesses should support and respect the protection of internationally proclaimed human rights; and
2. Make sure that they are not complicit in human rights abuses.

Labour

1. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
2. The elimination of all forms of forced and compulsory labour;
3. The effective abolition of child labour; and
4. the elimination of discrimination in respect of employment and occupation.

Environment

1. Businesses should support a precautionary approach to environmental challenges;
2. Undertake initiatives to promote greater environmental responsibility; and
3. encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption

1. Businesses should work against corruption in all its forms, including extortion and bribery.

Some countries in which PCE operate may have principles, practices or laws that are more demanding than those set out in this Code. Whatever the situation, the most stringent rule must be respected.

To whom does this Code of Ethics apply ?

This Code of Ethics applies to everyone working within PILOT CORPORATION OF EUROPE (including PILOT PEN France, Benelux and Hungary) – (hereinafter referred as “PCE” or “PILOT“).

We at PCE also expect our business partners to comply with this Code of Ethics when dealing with PCE, as we want to lean on shared values and ethical principles to build mutual trust.

In all countries, make sure our business partners and any person representing us with public authorities agree to comply with the principles laid down in this Code of Ethics. Each employee is the ambassador of PCE and should encourage his/her business partners to adopt similar standards.

What is the role of PCE’s management team ?

All Pilot management team bear a duty of exemplarity. They must :

• Ensure that the Code of Ethics is applied in full by their teams;
• Raise awareness of the importance of ethics within PCE ;
• Answer the questions of their team members and guide them in their daily ethical behavior;
• Report any alert received or difficulty encountered.

What to do if in doubt?

This Code of Ethics may not cover all situations. If you feel that you do not find the appropriate answers in there, you are encouraged to proactively seek advice from :

1. Your manager, or if not possible;
2. Compliance (Secretary general) or HR Officer;

Dialogue is always a solution.

What if there is something wrong?

In case of exceptional situation that cannot be resolved by the first two levels, you may send a report to PILOT whistleblowing system : responsable.ethique@piloteurope.com.

It is important to ensure that the reports collected are supported by consistent and detailed facts.

Sharing your concerns is not always easy and can be intimidating. That’s why the whistleblower’s report will remain confidential, and no reprisals can be taken against you if you report in good faith (i.e. whistleblowing system).

What are the key stages following the whistleblowing alert ?

Step 1 : The compliance officer will contact you to get further details

Step 2 : An investigation will be handled to analyze and verify facts

Step 3 : An investigation report will be shared at top management level and disciplinary sanctions might be decided

How should I know I am adopting the appropriate behaviour? the right reflexes:

1. Am I acting in accordance with the Group’s values and policies?
2. Am I acting in the best interest of the Company?
3. Are the laws and regulations respected ?
4. Would I be comfortable if my actions were made public?

⇒ If the answer to any of these questions is “no” then do not proceed or refer to your manager and if it is not possible to the Compliance or HR Officer for further advice.

What happens if the Code of Ethics is not respected ?

The Code of Ethics is a minimum requirement that must be respected by all, unless compliance would violate local law. Failure to comply with the Code of Ethics can have serious consequences, both for the individuals involved and for PILOT.

PCE commits to train all its employees and integrate this training path to all new comers.

If you fail to comply with the principles set out in the Code of Ethics, you may be held personally liable, and may be subject to disciplinary sanctions commensurate with the seriousness of the offence, in accordance with local laws and regulations, up to and including dismissal (i.e. PCE’s Internal rules). In this respect, PILOT undertakes to prevent and punish any violation of the Code of Ethics, as well as to implement corrective actions when necessary.

Ignorance of the Code of Ethics is no excuse. But dialogue protects you, as much as it enables us to move forward and improve ourselves.

Regular update

The necessity to update this Code of Ethics shall be assessed each year. This Code of Ethics will be appended to the Internal rules of PCE.

RESPECT FOR PEOPLE

We care for our people and we care about the impact our decisions have on the respect of human rights in our value chain. Respecting these values are at the core of our CSR approach, which are developed in our “Social Sustainable Policy”, “Health and Safety Policy” and “Responsible Purchasing Charter and Policy”.

Respect for Human Rights

Every PCE employee must respect human rights and fundamental freedoms at all times.

PILOT Group has set up manufacturing units on several continents. Wherever we operate, we fight against the practice of forced labor, child labor or any other form of discrimination in our activities and those of our business partners.

PILOT Group forbid child labor, we do not employ any person under 15 years of age. In all cases, we respect local regulations and we must not allow any minors under the age of 15 to carry out any work likely that could have an impact on their health or safety.

To this end, PILOT Group respects the Human Rights set out in the 1947 Universal Declaration of Human Rights, as well as fundamental International Labor Organization standards.

PILOT is committed to respecting national legislation on working hours and remuneration, and to upholding freedom of association and the effective recognition of the right to collective bargaining.

We are particularly vigilant in identifying any negative impacts, direct or indirect, of our activity on society, in order to prevent and, where necessary, remedy them.

We must therefore at all times

• Alert internally in case of doubt about the respect of human rights in our value chain
• Ensure respect for human rights in each of our areas of responsibility (including PCE’s suppliers and subcontractors)
• Make our stakeholders aware of our human rights commitments

Further information  :

• Responsible Purchasing Charter

Guarantee good health & safety working conditions

As part of their work at PCE, all employees must be able to exercise their profession in an ethical manner, in caring working conditions (particularly with regard to health and safety at work), with healthy social dialogue and without taboos.

It is essential that the physical, mental and social health of each and every one of our employees is preserved, in particular through life balance and personal well-being.

Each employee must be able to exercise his or her profession in a safe working environment.

To this end, every manager must foster a climate of respect that encourages dialogue and the expression of all issues. Every issue raised by an employee must be listened to with care and respect.

We must therefore at all times :

• Provide personal protective equipment and services to ensure a safe working environment
• Ensure that we are aware of and respect the various health, safety, wellbeing and security rules that apply to our activities.
• Report all safety issues and suggest improvements
• Respect the balance between professional and personal life

Further information :

• Internal rules (“Règlement intérieur”)
• Health and Safety policy
• Social Sustainable Policy (« Politique sociale responsable»)

Respect Diversity, Equity and Inclusion

PCE is a group in which every employee has a place to grow and develop skills. We believe that diversity and inclusion enhance the commitment, performance and capabilities of our employees.

Therefore, at PILOT, every employee is offered equal access to employment and to the tools necessary for the proper exercise of his/her duties, as well as personalized support in the development of his/her career within PILOT, as set out in our internal rules.

Every employee must be able to enjoy his or her rights, regardless of ethnic, national, social or cultural origin, gender, sexual orientation, disability, age, family situation, religion, political opinions or union membership.

Discrimination shall not be tolerated at PILOT. No decision can be taken on this basis. The same applies to harassment (i.e. PCE’s Internal rules).

Any pressure, pursuit or harassment of a moral or sexual nature is forbidden. PILOT expects all its employees to behave in a respectful and virtuous manner.

We must therefore at all times :

• Adopt an inclusive and open-minded attitude to ensure PILOT is a workplace where mutual respect is the rule
• Make decisions based on objective criteria
• Treat everyone equally
• Help a colleague facing difficulties.

In all cases, if you witness or are the victim of discrimination or harassment, never hesitate to first alert your manager, HR manager or alert your harassment and sexual harassment referents, and if it is not possible you may use our whistleblowing system. Confidentiality of the report will be guaranteed, and no reprisals will be taken against you for having reported such a case in good faith.

Protect personal data

All PCE employees and customers are entitled to respect of their private lives, and in particular to the protection of their personal data. Some personal data may be considered sensitive if they reveal information that could lead to discrimination.

PCE therefore undertakes to limit the collection of personal data and to process and protect it in accordance with regulatory requirements.

This protection requirement is set out in our “IT Charter” and in the GDPR rules (General Data Protection Regulation) applicable to PCE.

We must therefore at all times :

• Have a legal justification for processing personal and/or sensitive data
• Process only adequate, relevant and necessary data
• Apply the required level of security to the processing of personal data
• Document the processing of personal data.

Further information :

• IT Charter
• GDPR
• CNIL

ACT WITH INTEGRITY

It all starts with compliance with applicable laws and regulations, which implies compliance with French laws and regulations as well as with those laws and regulations that are applicable in any other jurisdiction where we carry out our business.

However, integrity does not stop with mere compliance with laws: we also expect an exemplary behaviour of everyone to ensure we act ethically at all times. This is key to preserve our reputation, our business and our people.

We expect everyone at PCE or working with Pilot to adopt an ethical behaviour at all times.

Fight against corruption and influence peddling

What is corruption?

Active corruption is committed when someone (the bribe giver) gives or agrees to give, directly or indirectly, an advantage to another person (the bribe taker) so that this person will carry out or refrain from carrying out an act of his/her duties for the bribe giver’s benefit.

Passive corruption is committed when someone (the bribe taker) solicits or accepts an advantage given, directly or indirectly, by a bribe giver. In exchange, the bribe taker carries out or refrains from carrying out his/her duties in the bribe giver’s interests.

Corruption is “public” when the bribe taker is a public official, and “private” when the bribe taker is a private individual. Both public and private corruption are strictly prohibited.

What are the various forms of corruption?

Corruption may involve money…

• payment of bribes or kickbacks,
• facilitation payments,
• price reduction,
• charitable contributions or sponsorship,
• payment of someone else’s debt,

… Or take other forms:

• gifts, travel, or invitations in violation of the Group’s policies,
• a job or promise to hire someone,
• performance of work for free,
• preferential treatment in a call for tenders,
• disclosure of confidential information,

What is influence peddling?

Influence peddling requires the involvement of an intermediary (a private individual or a public official) who uses (or claims to use) his/her influence to help someone obtain a favorable decision from a public authority or administration.

What are the consequences of corruption and influence peddling and the risks for PILOT and its employees?

At Company level, corruption triggers high risks in terms of reputation, financial impact and business opportunities. Anyone who commits corruption or influence peddling faces disciplinary sanctions as well as criminal proceedings (prison sentence and heavy fines).

At society level, corruption also causes considerable harm: it increases inequalities, discrimination, it impacts negatively our environment and it undermines democracies and social development.

This is the reason Pilot adopted a zero-tolerance approach towards corruption.

We must therefore at all times :

• Analyze the situation with an objective eye
• Avoid accepting or proposing undue advantages
• If in doubt, report immediately to the Compliance Officer or use the whistleblowing system.

Avoid conflict of interest

What is a conflict of interest?

A conflict of interest is a situation in which an employee’s personal interest conflicts, give the appearance of a conflict, or potentially conflicts with those of the company, and may therefore compromise (or give the impression that it could compromise) the impartial, loyal, and objective performance of the employee’s duties for the company.

What are the risks for the company and its employees?

We may all be confronted to this kind of situation, which may involve our personal (friendship or family) or professional relationships. A conflict of interest is not in itself prohibited. But it could be a weak signal of a more serious situation. Being transparent ensures this situation does not become an ethical issue.

We must therefore at all times :

• Report to our manager any situation which might influence or appear to influence our judgment or decision-making
• Abstain from taking part in the decision-making process in case of conflict of interests
• Seek advice is we are not sure about the situation to Compliance and/or HR Officer

Political neutrality

PCE does not contribute financially or in kind to political parties, politicians or related institutions. PCE respects its employees’ right to participate as individuals in the political process so long as they make sure that, in doing so, they do not represent the company or cannot be perceived as doing so.

Exercise caution on gifts and invitations

What are the risks for PILOT and its employees?

Providing or receiving gifts and invitations (including restaurant and sport or cultural event) is usually a mark of courtesy and is part of normal commercial relationship. However, they may trigger some risks, as they could be used as an inappropriate advantage granted to someone in exchange for a favorable decision. This is the reason they must under no circumstances be offered with the expectation of receiving something in exchange.

General prohibitions:

• Gifts and invitations are strictly prohibited during negotiations, calls for tenders, or competitive bidding
• Gifts and invitations should under no circumstances take the form of money or cash equivalent
• Gifts and invitations received at home are prohibited
• Gifts must never be solicited by the recipient
• Gifts should never cause embarrassment if they are revealed publicly
• Gifts must never be given to a family member or close friend.

They must always:

• Be authorized by the applicable local legislation(s)
• Be reasonable in nature and value
• Be respectful of the customs of the country in which the gift is offered
• Be sent to the beneficiary’s business address
• Be occasional (their frequency is subject to scrutiny)
• Be offered in a business context, for a legitimate commercial purpose
• Be reported with transparency to your manager if below 150€ or equivalent / person
• Be reported with transparency to your manager and the Compliance Officer if above 150€ or equivalent/ person
• Gifts and invitations to public officials require the Compliance Officer’s prior written consent.

We must therefore at all times :

• Refer to the PCE’s gifts & invitations policy when planning to grant or receive a gift or an invitation
• Strictly abide by these rules
• Seek advice is we are not sure about the situation

Be loyal in communication and protect confidential information

What is loyalty in communication?

Loyal communication is the basis of a strong and long-lasting relationship with our business partners and our stakeholders, whether for business negotiation or for financial reporting purposes. Each employee is an ambassador of Pilot in third parties’ eyes and we must therefore ensure that we preserve the Group’s image and reputation.

PILOT products are the result of constant research, innovation and unique know-how. Our confidential information is part of our most valuable assets and must be adequately protected. The need for transparency must therefore be balanced with the necessity to protect such intangible assets. Each of us undertakes in particular to apply the level of security and protection of our documents and computer/digital equipment and data, as may be required and to avoid any inappropriate disclosure (e.g. non-disclosure agreement).

We will communicate in a respectful, loyal and transparent manner towards our counterparts. We will protect our trade secrets and confidential information.

Such confidential information may include financial data or information relating to management strategy, employees, customers, collections and product launches, sales, potential acquisitions, or commercial activities that are likely to give us a competitive advantage.

We will also respect and protect our business partners’ confidential information.

We must therefore at all times :

• Respect applicable rules on information protection, use of digital technology and insider trading. Disclosure of non-public information must comply with the PILOT’s rules and be limited to people duly authorized like public authorities with a precise assignment and with a legitimate “need to know” and only on a strictly agreed and limited content.
• Immediately inform our manager if we discover that confidential information has been disclosed
• Be careful not to disclose confidential information while third parties are visiting our premises, while travelling or while talking in a public place.
• Seek advice if we are not sure about the situation

Further information :

• IT Charter
• Internal Rules

Prevent fraud and asset misappropriation

We will comply with internal control, prevent fraud and asset misappropriation.

We will ensure a transparent management, compliance and communication with our shareholders and provide adequate financial reporting.

PILOT is a listed company in Japan and as such, is governed by internal control regulations. It has therefore implemented a certain number of internal controls to ensure transparency, accuracy and reliability of its financial reporting in order to avoid investor deception. Each of us must fight against fraud, whether internal or external.

Each of us must protect the ownership and value of the company’s assets and avoid asset misappropriation. Keeping accurate financial and business records, performing reasonable due diligence on our business partners and running our business with integrity are a way to achieve this objective.

We must therefore at all times :

• Comply with internal policies put in place to prevent fraud (internal control framework including Japan-sox, segregation of duties, awareness trainings…)
• Ensure a true and accurate financial and management reporting
• Ensure company’s assets or finance are not distracted, misused or used for personal or other illegitimate purposes
• Investigate all suspicion of frauds

Cooperate with our suppliers

We have a responsibility towards all our partners and our value chain and we recognize the importance of our sourcing choices and their impact on society, the economy and the environment.

We believe that our suppliers have a responsibility to respect the principles set out in our Responsible Purchasing Charter and to manage the social, economic and environmental risks in their own supply chain. The Responsible Purchasing Charter defines mutual commitments between PCE and its suppliers to promote sustainable and ethical purchasing practices.

We must therefore at all times :

• Integrate social and environmental criteria in our purchasing decisions
• Take impartial decisions, promote fair competition with suppliers
• Ensure our suppliers respect our principles set in our Responsible purchasing Charter

Furter information :

• Responsible purchasing charter
• Responsible purchasing policy

Manufacture safe high-quality products for our customers and consumers

We are committed to manufacturing quality products and to delivering reliable information as to our products. This has been a key element in our long-standing presence on the market and must remain that way. We control the level of quality at every stage of the manufacturing of our products and we apply the highest quality and safety standard.

We respect the consumer protection regulation and we value customer and consumer feedback as well as societal expectations in order to feed our on-going improvement process.

We must therefore at all times :

• Provide transparent information on safety use of our products
• Comply with applicable rules in relation with product safety and consumer protection
• Ensure high quality product

Treat our competitors fairly and respect competition and consumer regulations

We respect the regulations and laws relating to competition in all the countries in which we operate.

Fair competition is a condition to innovation and progress.

In order to preserve our position on the market, we must avoid disclosing confidential information or otherwise share sensitive information from a competition standpoint with our competitors. We will collect information on them in a lawful way. We will treat our competitors respectfully, as we expect the same from them.

We prohibit any agreement – formal or informal – or attempted agreement with competitors aiming at organizing prices or sales conditions, to share a market or to boycott a market player, for example at professional meetings.

Our distributors are free to set their own prices.

We must therefore at all times :

• Comply with competition law rules
• Adopt a respectful behavior
• Ensure protection and non-disclosure of sensitive information

Commit to open dialogue with our other stakeholders

We respect the role that everyone has to play in civil society (our employees, trade unions, public authorities, Non-Governmental Organizations, associations, etc.) and are convinced that dialogue and respect are the essential conditions for healthy and constructive relations.

We support the development of local companies, including those that are key players in the social and solidary economy.

We partner several local associations and we support NGOs through product donations.

We must therefore at all times :

• Adopt a respectful behaviour
• Be open to dialogue
• Be constructive so as to find mutually satisfactory solutions

Further information :

• Donation policy

MINIMIZE OUR ENVIRONMENTAL IMPACTS

We make efforts to monitor and reduce the environmental impact associated with our activities all along our value chain.

Each year, we calculate our greenhouse gaz emissions and we aim to reduce by 50% our CO2 emissions on our scope 1, 2, 3 by k € of turnover by 2030 (vs 2018).

Each of us must comply with the applicable environmental policies of the company and adopt the right behavior in order to minimize the PILOT’s impact on the environment.

Whatever our role in the organization, we need to be proactive in finding ways to limit our environmental impact; we need to take into account the environmental impacts of our day to day actions, decisions and purchasing choices.

We must therefore at all times :

• Take into consideration environmental criteria when selecting a supplier, a product or a service.
• Report internally in case of environmental pollution risk
• Report any improvements ideas to the HSE manager

Further information :

• CSR report
• Environmental policy
• PCE sustainable purchasing policy
• PCE sustainable purchasing charter