Foundation Underpinning ESG Management

Respect for Human Rights

Basic Concept

At SEKISUI CHEMICAL Group, we consider human rights advocacy of all people affected by our business activities as our duty. 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.
Under this concept, SEKISUI CHEMICAL Group has organized human rights initiatives involving the Group based on the UN’s Guiding Principles on Business and Human Rights in the following manner. Grounded in the SEKISUI CHEMICAL Group Human Rights Policy formulated in May 2019, we will work to build a cycle to evaluate human rights impacts, integrate human rights into business, make reports, and establish a grievance mechanism in an effort to identify, address, and remediate any human rights risks that may arise from the Group’s business activities.
Under the current Medium-term Management Plan, the Human Rights Subcommittee was established by officers responsible for related departments of headquarters. With these departments taking the lead, steps have been taken to disseminate details of the Human Rights Policy, conduct due diligence within the Group and on its business partners, and put in place a grievance mechanism. In the next Medium-term Management Plan, we will steadily advance these business and human rights endeavors while strengthening our ability to execute initiatives at divisional companies and regional headquarters.

  • 11-01

Overview of SEKISUI CHEMICAL Group’s Human Rights Initiatives

Current Medium-term Management Plan Targets Results
Implement human rights due diligence within SEKISUI CHEMICAL Group on a continuous basis <Fiscal 2020>
・ Conducted human rights interviews at Higashi Nihon Sekisui Industry Co., Ltd. of the UIEP Company
<Fiscal 2021>
・ Conducted comprehensive global-scale human rights risk assessments (surveys)
<Fiscal 2022>
・ Drafted remediation plans at locations (6 locations) where issues were identified through the above risk assessments; measures taken at five locations; the remaining one location setting deadlines for implementing remediation plans in fiscal 2023
・ Conducted human rights interviews at Sekisui Industrial Piping Co., Ltd. (Taiwan) of the UIEP Company.
・ Conducted human rights interviews at SEKISUI HEIM KINKI CO., LTD. of the Housing Company
Disseminate guidelines among business partners and identify potential risks through surveys <Fiscal 2021>
・ Formulated procurement guidelines (Supplier Code of Conduct)
and obtained signatures for guideline compliance from approximately 61% of our key suppliers in Japan and overseas
・ Received responses from 67% of companies surveyed (capital of at least ¥100 million, sales of at least ¥30 million)
<Fiscal 2022>
・ Conducted interviews at 13 companies identified as high-risk supplier candidates as a result of the surveys
・ Promoted risk reduction activities in cooperation with one overseas company from among the above
As part of human rights education, conduct the Business and Human Rights e-Learning course ・ Conducted e-learning in eight languages for Group companies in Japan and overseas
<Fiscal 2020>
・ The response rate of Group companies in Japan: 64%
<Fiscal 2022>
・ The response rate of overseas Group companies: 75%
Complete the global framework for the S.C.A.N. Intra-company Whistleblowing System as a step to build a grievance mechanism ・ Completed SEKISUI CHEMICAL Group overseas deployment of whistleblowing contact points, except for Australia (Australia is scheduled for fiscal 2023)

To strengthen our response to a wide-ranging array of human rights issues in a cross-organizational manner, we established the Human Rights Subcommittee under the Sustainability Committee in fiscal 2022. Chaired by the Director and head of the Human Resources Department, this subcommittee is comprised of the heads of each specialized headquarters department, and assumes the role of formulating Group-wide policies regarding human rights. At the same time, four working groups linked to the Human Rights Subcommittee plan and execute concrete measures.
Likewise, we promote our human rights initiatives throughout the Group by sharing the policies and measures established by the Human Rights Subcommittee and each working group among each of the relevant departments of the Company’s headquarters and divisional companies, and by applying these down to the business site level. In fiscal 2022, the Human Rights Subcommittee met 12 times.

  • 11-02
Major Initiatives

Human Rights Due Diligence (SEKISUI CHEMICAL Group)

Overview of initiatives to Build a Human Rights Due Diligence*1 Framework
SEKISUI CHEMICAL Group launched initiatives aimed at building a human rights due diligence framework in November 2018. The major initiatives implemented up to fiscal 2022 are as follows.

  • From fiscal 2018 to fiscal 2019:
    Employed a specialized agency (Verisk Maplecroft*2) to analyze potential human rights risks in major businesses and conducted internal hearings based on the results of analysis.
  • Fiscal 2020:
    Implemented human rights interviews at domestic production sites.
  • Fiscal 2021:
    Conducted a survey-format human rights risk assessment on a global basis for management in all areas where the Group is located and for general as well as indirect employees at selected business locations.
    • -
      Human rights risk assessment implementation method:
      ・ Survey format (two types: one for management and one for general employees)
    • -
      ・ Management in all areas where the Group is located (North and Central America, Europe, Asia, Australia). (Production sites: 44)
      ・ General employees in Thailand, China, and India and foreign nationality employees in Japan who were identified as high risk as a result of the latent human rights risk analyses and dialogue with experts conducted in 2018 (Both general employees and foreign nationality employees include indirect employees). (Production sites: 21)
    • -
      ・ Select priority human rights topics by conducting an exhaustive survey and gathering the opinions of both management and general employees
    • -
      ・ Although no human rights issues requiring a critical or immediate response within the scope of the survey were revealed, priority human rights issues that were identified as requiring further review included working conditions for foreign nationality employees, fair wages, respect for religious practices, and inequalities in hiring and promotion.
  • Fiscal 2022:
    Remediated issues identified through the above risk assessments, and implemented human rights interviews at two locations in Japan and overseas.
  • 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.
  • A risk analysis and research corporation with a global perspective and knowledge of human rights, economic, and environmental risks.

Identified and remediated human rights risk based on global human rights risk assessments
In fiscal 2022, we confirmed the status of each situation on an individual basis for Group companies in Japan and overseas (total of six locations) at which issues were identified through the above human rights risk assessments. After formulating remediation plans to address the issues identified, steps were taken at five locations. (Remediation plan example: Draft employment agreements in workers’ native languages in order to promote an understanding of employment agreements among foreign nationality workers employed at Group companies in Japan). In regard to the remaining location, we laid out a remediation plan execution deadline of fiscal 2023, and will therefore continue to confirm its status.

Human rights interviews with foreign nationality employees implemented at overseas production sites
We received comments during individual dialogue with overseas experts regarding the importance of conducting surveys as to whether overseas Group company migrant workers had suffered human rights violations. Similarly, as part of the human rights risk assessments conducted in fiscal 2021, we confirmed that many duties were being performed by Vietnamese migrant workers at a Group company located in Taiwan. In response, in fiscal 2022 we interviewed the Vietnamese employees for the purpose of investigating the actual labor environments of migrant workers within the Group.

  • Targets
    Vietnamese workers employed at Sekisui Industrial Piping Co., Ltd. (Taiwan) of the UIEP Company
  • Implementation method
    • 1)
      Conducted a survey of Vietnamese workers based on the Dhaka Principles, an international standard regarding the dignified immigration of foreign workers, as a preliminary review.
    • 2)
      Based on the preliminary survey, Caux Round Table Japan* divided workers into groups of three or four, and interviewed each for around one hour.
    • 3)
      Confirmed the living environment by observing the shared housing in which the Vietnamese workers live
  • Survey content
    Forced labor, freedom of association, the right to collective bargaining, equal pay, and prohibition of discrimination, etc.
  • Results
    Although this interview investigation did not reveal any notable negative impacts on the human rights of the Vietnamese migrant workers, it did identify preparing multilingual pay statements and internal factory signage, reducing the burden of living expenses, securing access to employee whistleblowing systems, and others as issues requiring priority action. In response to these issues, Sekisui Industrial Piping Co., Ltd. (Taiwan) formulated a remediation plan and will address these issues in stages.
  • A non-profit organization with a network of various 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 with foreign nationality employees implemented at domestic construction sites
In light of frequent comments from Japan and overseas regarding the high level of human rights risk in Japan related to the general labor environment for foreign nationality employees, we conducted interviews at domestic production sites in fiscal 2020. Following-up on this effort, in fiscal 2022 we conducted foreign national employment management assessments*, including employee interviews, at construction companies of the Housing Company.

  • Targets
    1) Two foreign nationality employees working at SEKISUI HEIM KINKI CO., LTD. of the Housing Company
    2) Personnel and labor management supervisors for the aforementioned foreign nationality employees
  • Implementation method
    • 1)
      Conducted a preliminary survey consisting of 342 questions in 40 categories regarding human rights, and held interviews with personnel and labor management supervisors based on the survey results
    • 2)
      Conducted interviews with two foreign nationality employees
    • 3)
      Took remediation action in regard to the assessment results and matters indicated by third parties (Remediation action example: Always verify whether supervisory organizations and registered support organizations are certified bodies when hiring technical intern trainees and specified skilled workers).
    • 4)
      Received an A-rating as a result of the assessment, were recognized as a business in good-standing for appropriately employing foreign nationality employees, and acquired a Certificate in Appropriate Employment Company of Foreign National Employees.
  • Results
    Having received high marks in labor, job satisfaction, and other categories, our approach to employment and work hours as part of foreign national employment was judged to be appropriate. On the other hand, under the category of human resources management, despite having a foreign national human resources career development system in place to some degree, including systematic new employee training, systematic safety training, and Japanese language education, we received comments indicating issues regarding training with an outlook for medium- to long-term work and specifying career paths. In the future, we plan to deploy assessments covering foreign nationality worker management for both Group companies and construction companies along the supply chain.
  • This assessment is designed to confirm whether foreign national human resources are appropriately employed. Involved in foreign national human resources recruitment, foreign national employment support, and Japanese language education support, One Terrace Co., Ltd. serves as the certification organization.

Human Rights Due Diligence (Our Suppliers)

Caring About Human Rights Issues Across the Entire Supply Chain
Until now, we have conducted CSR procurement surveys of our direct suppliers. To ensure that the Group’s policies are understood throughout the entire supply chain, including secondary and tertiary suppliers, we formulated the SEKISUI CHEMICAL Group Sustainable Procurement Guidelines (Supplier Code of Conduct) in fiscal 2021. In addition to Japanese, we also prepared English and Chinese translations. Taking into account opinions of outside experts, the Supplier Code of Conduct is also intended to align with the United Nations Global Compact 10 Principles, the Guiding Principles on Business and Human Rights, and the SEKISUI CHEMICAL Group Human Rights Policy.
In addition to asking all our suppliers to extend this Code of Conduct to their secondary and tertiary suppliers, we have requested that suppliers sign on to acknowledge compliance with the guidelines. In this regard, we have obtained the agreement of approximately 61% of our key suppliers in Japan and overseas to work with us to achieve the Code of Conduct.

Details of human rights due diligence implementation in the supply chain
In order to enhance sustainable procurement, in fiscal 2021 we broadly revised the survey to include content that allows us to evaluate and confirm the compliance status and achievement status of the above Supplier Code of Conduct. Moreover, we began implementing the survey across the globe at the same time from fiscal 2021 in order to more rapidly address common global initiatives. As a result, we received responses from 67% of our suppliers that were subject to the survey.
In fiscal 2022, we conducted direct interviews with 13 companies with poor self-assessments on the above survey for the purpose of confirming whether there were any potential risks, and to confirm their situation. As a result, we determined that risk was low at 12 companies. We are implementing activities involving consultants in order to reduce the risk at the remaining company with its cooperation.
We also conducted investigations in regard to minerals that present the risk of human rights violations (child labor, etc.) at mining sites and wood that presents the risk of threatening the rights of indigenous people and the rights of workers as a result of deforestation. This move was taken as part of an effort to achieve sustainable procurement that respects human rights through revisions to the survey details and guideline formulation. The details are described in Responsible Procurement.

Human rights education

Human Rights Training for Group 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. Training, especially at such milestones as when an employee enters the Company or is promoted, is designed to raise awareness of human rights issues including forced labor, child labor, and harassment, thereby promoting the importance of respecting human rights and our human rights policy.
Moreover, as part of our human rights education for employees in Japan and overseas, we began our Business and Human Rights e-Learning course in Japanese and English, which is available on the Company intranet, from fiscal 2020. In fiscal 2022, we prepared versions of the course in German, Spanish, Dutch, Chinese, Thai, and Indonesian, and expanded this initiative to employees in all areas (North America, Europe, and Asia) in which the Group operates. Through these training and education means, we are advancing awareness toward the importance of and need to respect human rights as well as our human rights policy.
Moreover, the compliance manual provided to all Group employees contains information on topics including respecting human rights, prohibiting discrimination, preventing harassment, and protecting personal information. In this manner, we are promoting an understanding of a broad spectrum of information on human rights and compliance among employees.

Implemented SEKISUI CHEMICAL Group Human Rights Week
In order to provide awareness-raising opportunities that enable employees to act with respect for human rights, since fiscal 2022 we have organized SEKISUI CHEMICAL Group Human Rights Week (slated for the week of December 4 to December 10 in conjunction with December 10 as the date the Universal Declaration of Human Rights was adopted) as a new initiative.
As part of the first such event, the president released a message indicating the Group’s stance on respecting human rights. At the same time, we displayed our Human Rights Poster to encourage each individual employee to question whether they have violated the human rights of any individuals involved in their everyday work, including colleagues, business partners, and customers. We translated the message from the president into 11 languages, and prepared the human rights poster in Japanese and English before distributing it to all areas in which SEKISUI CHEMICAL Group operates.

  • 11-03

Grievance mechanisms

In order to take appropriate action intended to remediate any negative impacts on human rights that arise from our business activities, SEKISUI CHEMICAL Group has put various mechanisms into place to pick up on the feedback of stakeholders. These mechanisms include an internal whistleblowing system, reporting contact points for business partners, the Customer Consultation Office, and contact points for inquiries regarding sustainability.
SEKISUI CHEMICAL Group established the Sekisui Compliance Assist Network (S.C.A.N.) intra-company whistleblowing system for Group employees in 2002, since which time we have operated systems that can be used by all Group employees. Globally, we are proceeding with expanding the establishment of reporting points of contact to major overseas areas, and have completed their deployment to all areas except Australia. We aim to establish the reporting contact point for Australia in fiscal 2023.
Moreover, since fiscal 2015 we have established and operated reporting and consultation points of contact for our business partners that can be used by their executive officers and employees in Japan who are continuously conducting business transactions with SEKISUI CHEMICAL Group companies.
In order to establish systems that allow for access by a broader range of stakeholders, including foreign nationality employees and overseas business partners, going forward we will update the intra-company whistleblowing system to function in multiple languages, and will make efforts to further awareness of these systems and to establish reporting points of contact for overseas business partners.

Stakeholder Engagement

Dialogue with outside experts implemented by the Human Rights Subcommittee
As members of the Human Rights Subcommittee, the Director, Executive Officer, and Head of the Human Resources Department along with the heads of each specialized headquarters department met with outside experts (Caux Round Table Japan) to exchange opinions regarding social demands involving Business and Human Rights and the Group’s related initiatives.
Through their exchange of opinions with the experts, the members learned about the latest trends in social demands on companies in regard to human rights, and received opinions on SEKSUI CHEMICAL Group human rights initiatives and advice on how to best develop our related activities moving forward.

Introduced human rights initiatives at a seminar for promoting the implementation of human rights due diligence at Japanese companies, organized by the Ministry of Foreign Affairs
SEKISUI CHEMICAL Group participated in a seminar organized by the Ministry of Foreign Affairs of Japan to promote the implementation of human rights due diligence at Japanese companies through the execution of action plans regarding Business and Human Rights. During the seminar, we introduced the activities based on the Guiding Principles on Business and Human Rights that we have implemented thus far as a case study for human rights initiatives taken by a Japanese company. As we expressed at the seminar, through cooperation with employees, business partners, customers, local communities, and various other stakeholders, the Group is engaged in an ongoing effort to prevent and correct any negative impacts regarding human rights that the Group has affected.

Information disclosure

Actions in regard to the UK Modern Slavery Act
SEKISUI CHEMICAL Group discloses a statement, adopted by its Board of Directors, regarding its efforts to prevent any form of modern slavery or human trafficking in any part of the Group’s business or within its supply chains, in accordance with section 54 (1) of the UK Modern Slavery Act, which came into force in the UK in 2015.
SEKISUI CHEMICAL Group will also take appropriate measures to comply with human rights laws and regulations in countries and regions other than the UK that are relevant to its operations.