Responsible Procurement

SEKISUI CHEMICAL Group aims to achieve coexistence and shared prosperity by building more robust partnerships with its business partners and engaging in fair trade based on the following five basic concepts for materials procurement.

Openness
SEKISUI CHEMICAL Group opens its doors not only to domestic companies but also widely to overseas companies.

Impartiality and fairness
SEKISUI CHEMICAL Group selects business partners based on impartial and fair evaluation standards with emphasis on quality, price and delivery lead-time, services, etc., as well as environmental considerations.

Compliance with laws and regulations
When engaging in purchasing transactions, SEKISUI CHEMICAL Group will comply with relevant laws, regulations and administrative instructions in Japan and overseas.

Mutual trust
SEKISUI CHEMICAL Group will establish and maintain mutually beneficial relationships with its business partners, as well as sincerely fulfill all contractual obligations.

Environmental considerations
SEKISUI CHEMICAL Group will further promote the purchase of raw materials and goods that have minimal negative impact on the environment (Green Procurement), and strive to establish a resource-recycling society through concerted efforts with business partners.

Sustainable Procurement Guidelines summarize the procurement objectives that SEKISUI CHEMICAL Group and its business partners aim to achieve. Sustainable Procurement Guidelines are in line with the UN Global Compact 10 Principles, UN Guiding Principles on Business and Human Rights, and SEKISUI CHEMICAL Human Rights Policy, as well as serves as the criteria that must be observed by all business partners involved with the Group and the production of its products.
We ask our business partners to understand and comply with the purpose and content of these guidelines as well as cooperate with us in our efforts to realize a sustainable society.

As for SEKISUI CHEMICAL Group procurement, the Purchasing Group of Corporate Headquarters plays a central role in conducting transactions in accordance with Sustainable Procurement Guidelines and basic policies in cooperation with the purchasing departments of business sites and Group companies, as well as the Overseas Management Group.
In order to achieve more appropriate procurement throughout the supply chain, we encourage our secondary and tertiary suppliers to achieve and maintain socially responsible operations through our primary suppliers.
Cooperation with business partners is indispensable for promoting our initiatives, so we are working to foster their understanding regarding sustainable procurement and surveys. In fiscal 2021, we produced and released a video in which the executive officer in charge explains this directly to our business partners. We have also released this video with English and Chinese subtitles for our overseas business partners.

SEKISUI CHEMICAL Group conduct sustainable procurement surveys to assess whether our business partners are operating in a socially responsible manner. These surveys are aimed at building responsible supply chains to achieve and maintain sustainable procurement. Based on the survey results, we work with our business partners to resolve any outstanding issues. In fiscal 2021, we significantly revised the sustainable procurement survey, changing survey content from the original ISO-based format to the latest version of the CSR/Procurement Self-assessment Questionnaire formulated by the secretariate of Global Compact Network Japan (GCNJ). These revisions enable us to conduct more comprehensive surveys that include items related to human rights. In addition, the timing of the surveys had previously not been standardized, but we have made changes to ensure that surveys are conducted simultaneously worldwide. We plan to expand the scope of the survey as appropriate.

The Sustainable Procurement Survey was conducted in fiscal 2021.
We requested that 499 global raw materials suppliers respond to this survey, collected their responses, and evaluated and analyzed the results. The response rate was 82% domestic and 47% overseas. We will confirm the reasons for declines in response rates and examine measures to increase them.
Survey results revealed that the average score percentage for each of the nine key categories exceeded the passing mark (60%) for all areas. However, the results also showed that scores tended to be low for supply chains, coexistence with local communities, and human rights.
For business partners with low scores, we will conduct individual interviews to confirm the situation. If any problems related to sustainable procurement are identified, we will work with them to make improvements. In the unlikely event that a serious violation of the Procurement Guidelines is found, we will consider changing business partners.

We ask our suppliers to sign the Supplier Code of Conduct when conducting sustainable procurement surveys.
The Supplier Code of Conduct is formulated to ensure that our suppliers maintain high standards of safe working conditions, fair and respectful treatment of employees, and ethical practices. We have included in the Supplier Code of Conduct a section that requires business partner supply chains (secondary and tertiary suppliers) to achieve and maintain socially responsible operations. In so doing, SEKISUI CHEMICAL Group will work to expand sustainable procurement.

In March 2022, SEKISUI CHEMICAL Group signed the Declaration of Partnership Building, declaring that the Group will focus on coexisting in mutual prosperity throughout the supply chain, forging new partnerships (inter-company collaboration, IT implementation support, expert personnel matching, green procurement, etc.), and adhering to promotion standards.

SEKISUI CHEMICAL Group has conducted conflict mineral procurement annually. In light of recent circumstances, however, we revised our Conflict Mineral Survey Manual used since April 2017, commencing the new Responsible Mineral Procurement Survey Manual. Since fiscal 2021, we have been investigating in Japan conflict minerals used by armed insurgents as a source of funds, as well as cobalt and mica, for which human rights abuses (child labor, etc.) are a concern. In addition, we will identify smelters and respond according to risk levels in an effort to eliminate the use of corruption-related minerals.

SEKISUI CHEMICAL Group conducted surveys on 41 business partners about the species and traceability of trees used in its products and components, including the timber itself and products and components made from timber. Of the companies surveyed, the Group received responses from 40 of them. The survey breakdown was 60% certified forest timber, 9% legally certified timber, and 31% recycled timber. However, we determined that the current survey content was insufficient to evaluate and spiral up sustainable procurement levels. Accordingly, we commenced a study to establish timber procurement guidelines for evaluating sustainable procurement levels.