Procurement Initiatives

Basic Approach

We strive to ensure compliance with the laws, regulations, and social norms of Japan and the other countries and regions in which we operate. We also require our business partners to observe these standards of fulfilling their social responsibilities given the changing social expectations placed on companies. In principle, we conclude a basic contract with each business partner from which we purchase items such as equipment or raw materials, requiring the contracting parties to fulfill their corporate social responsibilities (CSR). Our criteria for selecting business partners include their CSR and environmental impact reduction initiatives.

The Global Procurement Division is in overall charge of the purchasing of raw materials, fuel, and equipment for use at our Company’s plants and our Group companies worldwide. Our procurement policy and Green Procurement Guidelines are posted on the Company’s website. The procurement policy is now published in Japanese, English, and Chinese. Given the standards of the Responsible Business Alliance (RBA)* Code of Conduct (formerly the EICC Code of Conduct) and changing frameworks for general business dealings, we are working to observe this policy in our procurement activities, and we require our business partners to do the same, too.

Our Group's Supply Chain

CSR supplier surveys and Carbon neutrality promotion

The results of the fiscal 2020 study did not identify any significant environmental or social impacts, but did identify issues with BCP measures and CO2 reduction targets.

In fiscal 2021, we promoted BCP measures including those concerning impact response measures for natural disaster risks related to major raw materials and monopoly materials. We completed BCP measures for flood countermeasures for about 100 major suppliers in Japan. We then proceeded to confirm that measures were in place for other hazards such as earthquakes, fire and pandemics, and completed the implementation of measures at all target suppliers, in some cases even producing plans for them. Among our suppliers in Europe, the U.S., and China, we have initiated BCP measures for approximately 70 priority suppliers that handle monopoly raw materials, including searching for second sources, securing safe inventory, addressing social impact. In addition, we have been working toward achieving carbon neutrality, and have asked about 50 major suppliers in Japan and overseas to set CO2 reduction targets. All of them have either set their own CO2 reduction targets or have completed the preparation of plans for setting such targets.

In January 2022, all of our plants and laboratories in Japan switched to electricity from renewable energy sources (hydroelectric, biomass and solar, but excluding nuclear power). Overseas, we switched to electricity from renewable energy sources in Europe in October 2021, and are moving forward with the switch to electricity from renewable energy sources in North America, Southeast Asia, and China.

Selection of Business Partners

When selecting new business partners, the decision to commence transactions is made based on fair and impartial judgment after applying the criteria established by the Global Procurement Division. When commencing transactions, we check whether the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors applies and if it does, we commence the transaction in accordance with this law and the relevant company rules. If we find that this law applies to existing transactions, we immediately take measures to ensure the legality of these transactions under this law.

We have established company rules requiring that we check whether new raw materials comply with chemical substance controls both domestically and internationally, and new raw materials are not adopted unless they conform to these controls. Relevant departments internally work closely together to investigate and make sure that the Company does not violate chemical substance controls.

We are convinced that it is important to establish a relationship of equals based on trust with every business partner and that the transactions should be beneficial to both parties.

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