Foundation Underpinning ESG Management

Striving to respect the human rights of all stakeholders affected by our business activities, we are promoting a wide range of global-scale measures.

Management Approach

Respect the Human Rights of All Individuals Affected by Business Activities

At SEKISUI CHEMICAL Group, we consider it our duty to advocate for the human rights of all people affected by our business activities. Nowadays, the enaction of rules and laws related to human rights continues to progress both inside and outside of Japan, and human rights issues are getting increasing attention in society. In these conditions, we consider human rights initiatives for not only employees of the Group, but also our business partners and other stakeholders to be essential for solidifying our sustainable management platform.

Understanding and Acceptance of the SEKISUI CHEMICAL Group “Human Rights Policy”

SEKISUI CHEMICAL Group began formulating the SEKISUI CHEMICAL Group “Human Rights Policy” in October 2018. Subsequently, after implementing a human rights risk assessment and securing approval at a meeting of the Board of Directors, a new Human Rights Policy was formulated in May 2019 and details disclosed in June 2019.
Unlike the earlier SEKISUI CHEMICAL Group Personnel and Human Rights Policy, which mainly focused on Group employees, the new Human Rights Policy is different in that it proposes to firmly respect human rights across the board, including the value chain beyond the Group, in compliance with the Guiding Principles on Business and Human Rights adopted by the United Nations Human Rights Council.
In fiscal 2020, we launched initiatives related to human rights due diligence and education as stipulated in the policy. Going forward, we will continue to work toward achieving an understanding of and instill this new Human Rights Policy among all employees of the Group, as well as our suppliers and business partners.

Actions in regard to the UK Modern Slavery Act

SEKISUI CHEMICAL Group previously released a statement in regard to the UK Modern Slavery Act through a UK Group company, but we released the SEKISUI CHEMICAL Group Modern Slavery Statement in September 2019 in recognition of the need for the Group as a whole to take action in regard to human rights issues.

The SEKISUI CHEMICAL Group Modern Slavery Statement is pursuant to section 54 (1) of the UK Modern Slavery Act2015 and sets out the actions taken by SEKISUI CHEMICAL Group to prevent any form of modern slavery or human trafficking in any part of the Group’s business or within its supply chains.

SEKISUI CHEMICAL Group will continue to take appropriate measures to comply with human rights laws and regulations in countries and regions that are relevant to our operations.

Sekisui Chemical Group Modern Slavery Statement for Financial Year (FY) 2020
https://www.sekisuichemical.com/csr/pdf/English_Modern_Slavery_Statement_for_FY2020.pdf(pdf:695KB)

Initiatives to Build a Human Rights Due Diligence* Framework

SEKISUI CHEMICAL Group in November 2018 launched initiatives aimed at building a human rights due diligence framework.

As a first step, we took the following measures to identify potential human rights risks within the Group.

  • (1)
    Employing a specialized agency to assess human rights risks in primary business activities
  • (2)
    Based on the risk assessment results, conducted Internal interviews with staff members of the Group
  • *
    Human rights due diligence is the ongoing management process of identifying and assessing any potential negative impact on human rights (human rights risks) from a company’s business activities, and if there are human rights risks, the process of creating mechanisms to prevent or mitigate the impact from such risks.

Assessing Human Rights Risks in Primary Business Activities

In November 2018, we employed an external specialized agency (Verisk Maplecroft*1) to conduct a human rights risk assessment among the primary business activities of SEKISUI CHEMICAL Group. On the basis of 10 human rights issues, this agency calculated a human rights risk score for four industries, namely Homebuilder, Auto Parts, Industrial Machinery and Goods, and Pharmaceutical. Moreover, the results, which take into account the risks of each country in which Group companies are located, confirmed that SEKISUI CHEMICAL Group business activities, particularly overseas (China, India, Thailand, Brazil), held a potentially high risk of human rights violations in terms of occupational health and safety, etc.

10 Human Rights Issues in Primary Business Activities

(1) Child labor (2) Fair wages, (3) Fair working hours, (4) Discrimination in the workplace, (5) Modern slavery*2 (6) Freedom of association and right to collective bargaining, (7) Rights of indigenous peoples, (8) Rights relating to property, assets, and housing, (9) Occupational health and safety, and (10) Right to privacy

Industry Priority Country (Latent) Priority Issues
Homebuilder Thailand ● Modern slavery
● Occupational health and safety
● Fair wages
Auto Parts China
India
Brazil
Thailand
● Fair wages
● Modern slavery
● Occupational health and safety
Industrial Machinery and Goods China
Thailand
● Occupational health and safety
Pharmaceutical China ● Occupational health and safety
● Right to privacy
  • A risk analysis and research corporation with a global perspective and knowledge of human rights, economic, and environmental risks.
  • The definition of slavery in the modern era as established in the UK Modern Slavery Act 2015. Primarily refers to (1) slavery, servitude, forced or compulsory labor, (2) human trafficking, and (3) exploitation (sexual exploitation, organ harvesting etc.).

Implementation of Internal Interviews Based on Human Rights Risk Assessment Results

Since February 2019, we have been implementing interviews of related internal staff with third parties (Caux RoundTable Japan*). By carrying out these interviews regarding countries with high latent risks identified in human rights risk assessments and with staff at the Group who have experience stationed in Thailand, China, and India, as well as related internal departments, we confirmed whether there was any gap between the assessment results and actual business conditions at the Company.
Interview Results

  • Awareness of safety at overseas production companies is high and safety activities have taken hold
  • Positive conditions such as a lack of discrimination toward immigrant laborers, foreigners, and women working

there were identified at the Group companies involved in the interviews

  • Although headquarters-led CSR procurement survey are implemented for suppliers, no supplier checks were performed from the perspective of human rights at the site level
  • Some overseas production companies have factories that use a large number of temporary workers (fixed-term employees)

As per above, some of the findings indicated issues requiring further confirmation of on-site conditions. We accordingly considered it critical to conduct interviews at our production sites in Japan and overseas with the aim of listening to the opinions of our employees to confirm if our business activities are adversely impacting human rights and to better understand how seriously those rights are being impacted. In fiscal 2020, we conducted interviews at Higashi Nihon Sekisui Industry Co., Ltd. an Urban Infrastructure & Environmental Products Company.

  • A non-profit organization with a network of a variety of CSR initiative organizations both inside and outside of Japan and extensive experience with support programs for initiatives to reduce human rights risks within corporate supply chains.

Human rights interviews implemented at domestic production sites

  • Targets
    1) Foreign nationality employees working at Higashi Nihon Sekisui Industry Co., Ltd. an Urban Infrastructure & Environmental Products Company (including contract and dispatch employees)
    2) Personnel and labor management supervisors for these foreign nationality employees
  • Reason for selecting this site
    Organizations both inside and outside of Japan have frequently indicated a high level of human rights risks in Japan related to the general labor environment for foreign nationality employees while Japan is not considered a country with high latent risks based on the aforementioned risk assessment. Since this production site has relatively higher ratio of foreign nationality employees compared to other Group domestic locations, we considered that implementing the interview here would be meaningful.
  • Implementation method
    Although we initially planned to hold the interviews in person, business trips to the site were canceled due to the COVID-19 pandemic and they were conducted remotely instead.
    Caux Round Table Japan interviewed the employees in groups of 1 – 4 for about one hour each.
  • Results
    Although no serious human rights risks were identified, a feedback reporting session was implemented with Higashi Nihon Sekisui Industry Co., Ltd. to share extracted issues for improvement such as the need for multilingual support for plant internal guidance and notices.
    In addition to follow-up evaluation related to handling of these issues, we will also carry out similar human rights interviews at overseas locations in the future. In this way, we will develop a framework for human rights due diligence.

Business Activities That Respect Human Rights with Business Partners

Along with its suppliers, SEKISUI CHEMICAL Group engages in business activities that respect human rights as part of its obligation to all stakeholders. All Group employees are provided with a copy of the Company’s Compliance Manual. We have set strict standards for respecting human rights, prohibiting discrimination, preventing harassment, and protecting personal information. We conduct training and e-learning sessions for employees about the prevention of all forms of harassment. We work diligently to raise the understanding and awareness of such issues among all of our employees.

Programs for the Purpose of Preventing Harassment

In order to prevent power, sexual, maternity, and other forms of harassment, SEKISUI CHEMICAL Group continues to cover harassment prevention as part of its compliance educational programs during employee rank-based training, including new employee and newly appointed manager trainings. In this way, we provide knowledge for preventing harassment tailored to each rank and position. We also periodically provide harassment training as part of field-based educational programs.

Assessing the Human Rights Situation at Our SuppliersCaring About Human Rights Issues Across the Entire Supply Chain

Through CSR procurement with our suppliers, we make sure our business partners respect human rights. In order for our suppliers to understand the Group’s procurement policy, including respect for human rights, we have produced English and Chinese translated versions as well as the Japanese version and are promoting the process of making procurement policies available in a variety of languages, such as by posting them in Japanese and English on our websites.

With regard to suppliers that do not meet the prescribed standards, a request is made to ensure that the necessary steps are taken to resolve any issues. SEKISUI CHEMICAL Group works together with suppliers in the implementation of appropriate measures. We are making progress with the development of mechanisms, designed specifically for our overseas business partners and suppliers, to encourage improvements via our regional headquarters.

We are currently focused on confirming procurement policies with our direct business partners but are also drafting procurement guidelines that incorporate specific content while taking into account opinions of outside exports to ensure that SEKISUI CHEMICAL Group policies are being widely adhered to throughout the entire supply chain, including at secondary and tertiary suppliers. In light of this, we plan to confirm that business partners are complying with Group policies from fiscal 2021.

We are also considering endorsing and participating in accredited supply chain initiatives in order to further improve the quality of human rights due diligence.

Major Initiatives

Engagement with External Stakeholders

SEKISUI CHEMICAL Group in August-November 2020 took part in a Stakeholder Engagement Program* in which participants with differing backgrounds, including those from corporations, NGOs and NPOs, and academia exchanged opinions in order to promote human rights due diligence. After listening to questions being raised from NGOs, NPOs, and academic experts, participating companies identified and discussed important human rights issues in various industries, using the human rights guidance tools developed by the United Nations Environment Program Finance Initiative (UNEPFI).

We also engaged in individual dialogue* with overseas experts in October 2020, speaking with specialists inhuman rights, including a global value chain expert from India, as well as experts from the Danish Institute for Human Rights, and the United Nations Development Programme (UNDP) in regard to SEKISUI CHEMICAL Group’s initiatives in human rights. The discussions included advice from these experts as to how the Company could best develop its related activities moving forward.

Through the incorporation of external opinions obtained here, we will continue to promote human rights initiatives on a systemic basis in accordance with the Guiding Principles on Business and Human Rights.

  • The Stakeholder Engagement Program and the individual dialogue were both organized by Caux Round Table Japan.

Conducting CSR Procurement Surveys for Business Partners

Guided by its procurement policy, SEKISUI CHEMICAL Group has been conducting surveys focused on social responsibility, environmental conservations, and the human rights considerations of our partners since 2007.

Although we have conducted surveys at SEKISUI CHEMICAL and Group companies as well as in each overseas region up until now, we will change to a general global survey from fiscal 2021 in order to more rapidly address common global initiatives.

We are currently formulating sustainable procurement guidelines that cover the UN Global Compact 10 Principles in order to enhance sustainable procurement. For the fiscal 2021 survey, we plan to significantly revise survey content to confirm guideline compliance status and substantially increase survey categories. We will also add suppliers of electric power and production equipment manufacturers to our business partner surveys and expand the overall scope.

Human Rights Training and Education for Employees

SEKISUI CHEMICAL Group conducts training and educational programs focusing on the theme of human rights for its employees. In this manner, the Group is endeavoring to engage in management that takes into consideration concerns regarding human rights.

As part of human rights education for employees from fiscal 2021, we began our Business and Human Rights E-Learning course, which is available on the company intranet. Formulating content for domestic and overseas employees, we foster attitudes oriented towards respecting the human rights of everyone affected by business activities.

In addition, the compliance manual for domestic Group companies and the global compliance manual for overseas Group companies outline respect for human rights and measures for the prevention of harassment. Moreover, training programs that aim to prevent all forms of harassment are held every year, with 367 individuals taking part in fiscal 2020.

Addressing the Issue of Conflict Minerals

Sekisui Chemical is concerned about the conflict mineral problem, namely the mineral resources controlled by armed forces in the Democratic Republic of Congo and neighboring countries that commit human rights violations and destroy the environment. We conduct surveys on the use of conflict minerals at companies throughout our supply chain from a CSR perspective.

We put our “Conflict Minerals Survey Guidelines” into effect in April 2017. These guidelines were newly formulated for each Group division* responsible for receiving survey requests for conflict minerals from suppliers and for conducting the surveys.

In fiscal 2020, we conducted 471 conflict mineral surveys. Although we were unable to identify any conflict minerals among the surveyed companies, there was one case of smelting facility uncertainty. We will continue to conduct these surveys in fiscal 2021.

  • For the quality control department of each divisional company factory and the quality control departments of affiliated companies or affiliated company factories