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

Commitment

Message from the Chairperson of Supply Chain Committee

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Amid rising expectations of stakeholders on the commitment of companies towards corporate social responsibility (CSR), we are now facing a time where the quality of CSR activities at suppliers and other trade partners is questioned. In response, the Sumitomo Riko Group has been emphasizing CSR of the supply chain, including establishment of the "CSR Guidelines for Sumitomo Riko Group Suppliers." The Supply Chain Committee established in 2014 under the CSR Committee is stepping up activities from a Group-wide, global perspective.
In order to ensure stable business activities, the Supply Chain Committee formulates a business continuity plan (BCP), which involves securing the cooperation of suppliers worldwide, promote environmentally conscious procurement, and compliance. In addition, the Committee is spearheading cross-functional activities that respect the principles of the United Nations Global Compact to which the Company is a signatory. We need the support and cooperation of our stakeholders, above all, of our suppliers, to ensure the success of these initiatives. I would greatly appreciate our stakeholders' further understanding, cooperation and guidance.

Hideyoshi Yasuda
Chairperson of Supply Chain Committee
Managing Executive Officer

Approach to Procurement

Sumitomo Riko’s procurement activities are governed by its Basic Policy on Transactions and its Code of Conduct, which were established in May 2006. We issued the CSR Guidelines for Sumitomo Riko Group Suppliers in November 2011. In October 2014, taking the opportunity of our endorsement of the United Nations Global Compact, we revised the CSR Guidelines for Sumitomo Riko Group Suppliers by adding responses to conflict minerals, anti-corruption measures and other items. In August 2019, with the formulation of our mid-term business vision, the Sumitomo Riko Group 2022 Vision, we further revised the Guidelines to reflect the Sumitomo Riko Group Corporate Action Charter.
We have declared to internal and external stakeholders that we will operate our business in compliance with the Basic Policy on Transactions, the Code of Conduct, and the Guidelines. We also seek our suppliers' cooperation in order to ensure transparency. For example, we request our suppliers to inform the point of contact for compliance-related matters if they detect any inappropriate behavior in our procurement activities.

Basic policy on transaction

We consider Sumitomo Riko and its suppliers to be partners on an equal footing, and therefore we ensure that all transactions are conducted in a fair and transparent manner and that promises and contracts are always respected.

Code of conduct(For Sumitomo Riko Employees)

  1. The selection of clients should be implemented in accordance with guidelines related to procurement.
    (We never decide and support a specific supplier due to personal reasons.)
  2. All determinations on terms and conditions of transaction and releases of information to clients should be made in a fair manner.
  3. Sumitomo Riko shall pay significant attention to management of the confidential information regarding suppliers and must not use such information for any purposes other than procurement activities.
  4. Sumitomo Riko must not accept from its suppliers, nor ask a supplier for, any remuneration such as a gift or entertainment that exceeds the scope of social norms.

Reaction to violations

If our employees violate the matters outlined above, we will take firm action as specified in employment regulations.

Basic Transaction Agreement

In fiscal 2018, we revised the template of the basic transaction agreement, which we conclude with our suppliers. Provisions on matters, such as ensuring compliance with laws and regulations, protection of personal information, elimination of antisocial forces, and promotion of socially responsible procurement, were newly included. In the agreements with our suppliers, we have clarified our resolve to promote socially responsible procurement throughout the supply chain in cooperation with our suppliers.

Sumitomo Riko Group Supplier CSR Guidelines

We distribute the "Sumitomo Riko Group Supplier CSR Guidelines" to our suppliers to communicate our approach to socially responsible procurement and the specific code of conduct. We also request our suppliers to communicate Sumitomo Riko's policy on socially responsible procurement to their suppliers so as to promote socially responsible procurement throughout the supply chain.

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Establishment of the Supply Chain Committee

In July 2014, Sumitomo Riko established the Supply Chain Committee as a sub-committee of the CSR Committee. The organizational structure of the Supply Chain Committee is designed to respond to the Group's globalization and the increasing complexity of the supply chain. The Supply Chain Committee checks various activities of the Group concerning socially responsible procurement (activities concerning the environment, compliance, risk management, and other CSR-related themes) and provides guidance. By sharing the Group's activities with suppliers and by collaborating with them, the Supply Chain Committee spearheads the Group's initiatives to implement and strengthen socially responsible procurement throughout the supply chain.

Mid-term Vision for Procurement Activities

In procurement activities conducted across the business units, including domestic and overseas Group companies, the Group will systematically implement the following four items to strengthen cooperation with suppliers and pursue enhancement of management functions and mitigation of latent risks by increasing efficiency and speed in procurement management operations.

  1. Strengthening of the supply chain:
    We will strengthen mutual communication with suppliers, through unified management of information related to transactions with suppliers, CSR questionnaire surveys, etc., in order to implement socially responsible procurement and will strengthen the foundation for procurement management.
  2. Legal, regulatory and contract-related matters:
    We will collaborate with our suppliers to ensure compliance with laws and regulations and promotion of socially responsible procurement, in order to meet customer expectations by implementing a procurement system capable of responding to the evaluations of third-party auditing organizations, such as the Responsible Business Alliance (RBA)*.
  3. Crisis management:
    We will enhance supplier information in order to further strengthen the risk management structure globally.
  4. Education and awareness-raising activities:
    We will seek to increase understanding and awareness of procurement-related compliance by continuously engaging in education and awareness-raising activities within the Group by utilizing training and e-learning.

* RBA:
The Electronic Industry Citizenship Coalition (EICC) changed its name to the Responsible Business Alliance (RBA) in October 2017. The RBA is an NGO which major electronic products manufacturers established in 2004 to strengthen efforts to address social, environmental, and ethical issues concerning supply chains by preparing and following a common code of conduct. The RBA independently conducts surveys and audits of the state of compliance with the code.

SUMITOMO RIKO COMPANY LIMITED.

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