Responsible Procurement

SEKISUI CHEMICAL Group aims to continue evolving in its procurement activities with respect to accountability, transparency, and respect for stakeholders' interests, based on its Long-term Vision, Vision 2030, Vision Statement: "Innovation for the Earth: In order to realize a sustainable society, we support the basis of LIFE and will create peace of mind for the future”. In addition to the conventional concepts of Q (quality), C (cost), and D (delivery), we therefore revised and made additions to the Basic Procurement Policy, guidelines, and surveys during our current Medium-term Management Plan in order to promote responsible procurement that better considers society and the environment.
preparation for the next fiscal year's Sustainable Procurement Survey, we worked to list all suppliers in our supplier due diligence, which takes into account the Company’s negative impact, contributions to, or direct links to people, the environment, and society. At the same time, we identified new methods to improve the effectiveness of due diligence and developed IT systems to undertake the necessary management. Recognizing that society’s demands on companies will increase in the future, we will undertake a review in a timely and appropriate manner based on trends in overseas laws, regulations, and directives.

SEKISUI CHEMICAL Group recognizes procurement-related risks as follows.

We established the SEKISUI CHEMICAL Group Basic Procurement Policy as a policy to promote CSR procurement, which we also posted and disclosed on the Group’s website. Since its formulation in October 2006, we have expanded the content of the Policy to include conflict minerals in 2014 and timber procurement in 2018 in response to social issues and demands that have arisen. In 2019, we further enhanced the Policy by incorporating environmental considerations. In February 2024, we revised the Basic Procurement Policy together with the SEKISUI CHEMICAL Group Human Rights Policy, calling on suppliers to fulfill their responsibilities to respect human rights. At the same time, we posted information on the Company’s website to widely publicize details.

Sustainable Procurement Guidelines (Supplier Code of Conduct) 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, and serve 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.

At SEKISUI CHEMICAL Group, the Purchasing Group of Corporate Headquarters plays a central role in conducting procurement-related transactions in cooperation with the purchasing departments of business sites and Group companies as well as the Overseas Management Group. All transactions are conducted in accordance with our Basic Policy on Sustainable Procurement and Guidelines.
In order to achieve more appropriate procurement throughout the supply chain, we encourage secondary and tertiary suppliers to realize and maintain socially responsible operations through our primary suppliers.
Cooperation with business partners is indispensable to the realization of sustainable procurement. For this reason, we are working to promote the understanding of suppliers regarding sustainable procurement and surveys. The Basic Policy on Sustainable Procurement and Guidelines are available on our website in English and Chinese for overseas business partners.

SEKISUI CHEMICAL Group conducts sustainable procurement surveys to assess whether business partners are operating in a socially responsible situation. The purpose of these surveys is to build a responsible supply chain and to realize and maintain sustainable procurement. Based on the survey results, we will work together with our business partners to resolve any issues that arise.
In fiscal 2021, the sustainable procurement survey was drastically revised. The contact of each survey has been changed from the original ISO-based format to the latest version of the CSR/Procurement Self-assessment Questionnaire prepared by the secretariat of Global Compact Network Japan (GCNJ). These revisions enable us to conduct more comprehensive surveys that include items related to human rights. In the past, the timing of each survey was not standardized, but we have revised to ensure that surveys are conducted simultaneously worldwide. We plan to expand the scope of the survey as necessary.

Each time for new business partners and once every three years for existing business partners

Surveys are conducted using the latest version of the CSR/Procurement Self-assessment Questionnaire

The Purchasing Group of Corporate Headquarters manages the entire survey, while business site and Group company purchasing departments are responsible for requesting business partners to fill out questionnaires and collecting their responses. The Overseas Management Group and Group company purchasing departments are tasked with conducting surveys of business partners abroad.

SEKISUI CHEMICAL Group conducts surveys of its business partners regarding sustainable procurement.
In fiscal 2022, the Group held a direct hearing with an overseas business partner, who at that time agreed to work together to make improvements regarding sustainable procurement. Subsequent dialogue was undertaken in fiscal 2023 to confirm the status of progress.
As a result, we confirmed that the issues that had been raised at the time of the hearing, such as the return of passports, the return of deposits, and the preparation of employment contracts in the native language, had been completed and improved.

SEKISUI CHEMICAL Group asks suppliers to sign the Supplier Code of Conduct when conducting its survey on sustainable procurement.
The Supplier Code of Conduct is designed to ensure that suppliers maintain high standards of safe working conditions, fair and respectful treatment of employees, and ethical practices. In our Code of Conduct, we have established items that require our suppliers' supply chains (secondary and tertiary suppliers) to achieve and maintain socially responsible conditions. Through these efforts, we aim to expand sustainable procurement.

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

SEKISUI CHEMICAL Group holds in-house training sessions to deepen understanding of surveys on the background behind conflict minerals (minerals that fund armed insurgents) and social changes (human rights violations such as child labor).
This training was conducted prior to the survey based on the Responsible Mineral Procurement Survey Manual.
The survey was conducted at 35 sites in Japan and 16 sites overseas that handle the subject minerals. As a result, 96% of the raw materials containing the target minerals in Japan were identified at smelters, and 4% were unknown. Overseas, 99% were identified at smelters, and 1% were unknown.
In fiscal 2024, we will consider responses in line with the risk levels of undisclosed or unknown raw materials.

In the course of our business activities, we procure wood itself or wood as a raw material. We are aware that this may have a negative impact on human rights and the environment.
At COP26 in November 2021, the leaders of more than 100 countries, including Japan, signed a document promising to end deforestation by 2030.
In response, the Group made significant progress regarding due diligence in fiscal 2022.
Specifically, we set a new target of zero deforestation by 2030 and reviewed our Timber Procurement Policy^* in an effort to achieve this target.