Supply Chain
Shareholders and Investors, Suppliers and Other Trade Partners
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CSR Activities on Supply Chain

Strengthening the Supply Chain

Monitoring of the status of CSR activities

To practice socially responsible procurement together with our suppliers, we request our suppliers to promote activities that adhere to the Sumitomo Riko Group Supplier CSR Guidelines issued in 2014. Since fiscal 2016 we have been conducting CSR questionnaire surveys of our suppliers as a tool for them to review the extent to which they are compliant with codes of conduct on CSR, and to identify current and future issues.
In fiscal 2019, we were able to conduct CSR questionnaire surveys of suppliers accounting for at least 90% of the value of procurement in Japan, a target declared in the Sumitomo Riko Group 2022 Vision (2022V), confirming the status of their CSR activities and providing them with feedback. Going forward, we intend to expand the targets of the questionnaire survey to suppliers of Group companies globally.
Through these activities we will work to establish a more robust supply chain by deepening communication with our suppliers and supporting their efforts, as well as informing them of our CSR procurement policy.

Coverage of the CSR questionnaire survey and targets
Fiscal yearFY2016FY2017FY2019FY2020KPI
Countries coveredJapan (Sumitomo Riko on a non-consolidated basis)Group companies in Japan and overseasGroup companies in Japan and overseasOverseas group companiesGroup companies in Japan
Number of suppliers covered by the questionnaire survey245129186United States, Thailand, China 100 companies in totalConduct CSR questionnaire survey of suppliers accounting for at least 90% of the value of procurement in Japan by fiscal 2020 → Achieved ahead of deadline

Legal, Regulatory and Contract-related Matters

Environmentally conscious procurement

Our Green Procurement Standards for Suppliers identify "prohibited substances" and "substances for which monitoring is required" as defined by laws and regulations as well as additional substances in those categories specified by our customers. The Green Procurement Standards for Suppliers have been revised as necessary to reflect changes in environmental regulations.
In response to the enforcement of the REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) EU Regulations, we have required our suppliers to observe the REACH Regulations since January 2008. We also hold briefings for suppliers of materials and components. In these ways, we are striving to raise awareness of our suppliers about REACH and ensure compliance.
At Sumitomo Riko, we will continue reviewing our Green Procurement Standards for Suppliers to reflect changes in environmental regulations in Europe and around the world, and promote a shared understanding among our customers and suppliers.

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Sustainable procurement of natural rubber

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Sumitomo Riko vigorously promotes dialogue with its suppliers, and we are also progressively ascertaining the status of the CSR activities of our secondary suppliers, in addition to those of our primary suppliers. In particular, regarding initiatives concerning natural rubber, which we procure mainly from Southeast Asia, the responsible officer for procurement, procurement managers, and other employees of Sumitomo Riko visited natural rubber processors in the supply chain and confirmed that there are no problems concerning the working environment and human rights. We visited two natural rubber processors in Thailand in 2016, natural rubber farms and six natural rubber processors in Indonesia, Malaysia, and Vietnam in 2017, five natural rubber processors in Thailand, Indonesia, and Vietnam in 2018, and one natural rubber processor in Thailand in 2019. Going forward, we will continue this on-site inspection and confirmation program with the cooperation of our overseas procurement sites in each area.

Stance on conflict minerals

In 2012, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act came into force with the aim of stopping armed groups engaged in abuse of human rights in the Democratic Republic of Congo (DRC) and adjacent countries from funding through the sale of certain minerals. Section 1502 requires companies that are publicly listed in the U.S. to report any usage of such "conflict minerals" (gold, tantalum, tin and/or tungsten) to the U.S. Securities and Exchange Commission. We conducted a survey to ascertain usage of such minerals by our Group companies and our suppliers. The survey indicated that a number of tin, tantalum, and tungsten compounds are used in our production processes, but that production and trade of none of them have contributed to conflict financing. We continue to conduct a periodic survey in cooperation with suppliers and report the results to customers in a conscientious manner.

Crisis Management

Sumitomo Riko has compiled a list containing the basic information regarding our global suppliers and continues to promote the establishment of foundations for swift information gathering and dissemination at times of earthquakes and other disasters. In 2016, by incorporating information about our secondary suppliers, including suppliers of principal raw materials, we established a system for disseminating information to suppliers in a timely manner in the event of an earthquake or other disaster and for confirming the safety of suppliers, including any impact on supply. This system allows us to take swift initial action and to implement subsequent measures in response to the situation.
Going forward, we will continue to promote establishment of business continuity plans (BCPs) worldwide in cooperation with our suppliers and strengthen our crisis management capabilities.

Education and Awareness-rasing Activities

Every year Sumitomo Riko holds an in-house seminar on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors (Subcontractors Act) for all employees of the Group in Japan, with the head of the procurement department serving as the lecturer. The Global Purchasing Headquarters, which is a member of the Supply Chain Committee, and procurement departments of business units, which are responsible for education and training concerning procurement within the respective business units, provide education and training corresponding to practical needs. Needs are meticulously addressed, such as by responding to requests from other relevant departments and subsidiaries and affiliates to hold workshops at their premises, with an emphasis on Q&A from a practical viewpoint.
Furthermore, education and training for new employees and younger employees as well as e-learning on compliance for all employees are provided periodically to enhance understanding and raise awareness.
In March 2015, we established the Sumitomo Riko Group's procurement rules in Japanese, English, and Chinese and applied the rules to subsidiaries and affiliates overseas. We are striving to inculcate socially responsible procurement throughout the Group worldwide. To that end, procurement manager meetings are held in each overseas area, while for suppliers, we hold workshops on socially responsible procurement at suppliers' meetings.

SUMITOMO RIKO COMPANY LIMITED.

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