CSR Activities on Supply Chain

Shareholders and Investors, Suppliers and Other Trade Partners

Strengthening the Supply Chain

Declaration of Partnership Building

In March 2022, our company formulated and announced the "Declaration of Partnership Building" recommended by the Cabinet Office and the Small and Medium Enterprise Agency. In accordance with this declaration, we will promote cooperation and coexistence with our business partners in the supply chain and work to add value to the entire 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.
Status of CSR Survey Implementation
  Result for FY2016 to FY2022 KPI
Subject suppliers and number of suppliers Domestic (non-consolidated): 330companies
Domestic Group: 230companies
Overseas Group: 62companies
  • By 2020, we achieved the implementation of CSR questionnaires for suppliers accounting for more than 90% of our domestic procurement value.
  • In 2021, we are focusing on domestic suppliers (especially small and medium-sized enterprises) that are highly dependent on us.

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.

Sustainable procurement of natural rubber

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, as for our efforts in the area of natural rubber, which we procure mainly from Southeast Asia, our officers and employees in charge of procurement visit processing plants in the supply chain to confirm that there are no particular problems related to labor practices, human rights, health and safety, and environmental protection. In 2016, we visited two companies in Thailand; in 2017, we visited six natural rubber plantations and natural rubber processing manufacturers in Indonesia, Malaysia, and Vietnam; in 2018, we visited five companies in Thailand, Indonesia, and Vietnam; and in 2019~2022, we conducted a site survey inspection of one company in Thailand. We will continue to conduct onsite inspections and confirmations in cooperation with overseas procurement bases in each area.
Furthermore, in July 2022, we joined the Global Platform for Sustainable Natural Rubber (GPSNR*). We have also developed a Sustainable Natural Rubber Procurement Policy in 2023, which reflects the policy framework approved at the GPSNR General Assembly in September 2020.
There are more than a dozen major types of raw rubber used by our Group globally, of which natural rubber alone accounts for more than 40%. By endorsing the GPSNR policy, we will ensure the traceability and sustainability of our natural rubber procurement and aim to provide a stable supply of high-quality products into the future.

*Global Platform for Sustainable Natural Rubber

Related information

Stance on conflict minerals

In the Democratic Republic of the Congo (DRC) and neighboring countries, 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 from funding through the sale of certain minerals in 2012. This would impose reporting requirements to the U.S. Securities and Exchange Commission (SEC) on U.S.-listed companies that use the 3TG (gold, tantalum, tin, and tungsten), which are designated as conflict minerals. 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.
Furthermore, we have expanded the scope of our investigation to include minerals other than the 3TG (cobalt and mica) and high-risk areas (CAHRAs) outside the DRC and neighboring countries, and we will continue to investigate and, with the cooperation of our business partners, respond to customer reporting in good faith.

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, we organized information on our major raw materials and other suppliers, and introduced a safety confirmation system that allows us to send out information to suppliers in a timely manner in the event of an earthquake or other disaster, and to ask them to respond to whether or not their supplies have been affected. Furthermore, we have established a system for prompt initial response and subsequent countermeasures, such as expanding information on secondary and subsequent suppliers.
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 and the Purchasing Division of each business unit, as the department responsible for education and awareness-raising within the business unit, conduct education and awareness-raising activities in line with actual business practices, and at the request of related departments and affiliates, provide meticulous on-site training that emphasizes question-and-answer sessions from a practical perspective.
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.


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