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Third-party Evaluation and Independent Reviews

Social Issues Attributable to JSR Group's Corporate Activity / Supply Chain Management

FY :
Fiscal Year means the year starting April 1st.
For example, FY2016 means April 1, 2016 - March 31, 2017

1. Basic Philosophy

The Corporate Mission of JSR Group "Materials Innovation — We create value through materials to enrich society, people and the environment".
We believe that an important role of JSR Group is to offer innovative materials and excellent products that meet customer needs and contribute to the making of a better society.
We are able to respond to social issues through our business partners and supply chain management.

2. Supply Chain Management

(1) CSR/sustainable procurement

JSR Group supply chain management has a unique feature of a chemicals manufacturer supplying materials to various industries and supporting society. Specifically, that is our ability to deliver products of discernible quality to our customers reliably and without interruption.
Supply chain management is specific to each of our businesses and so is different between the Petrochemical Products Business and the Fine Chemicals Business, or the strategic businesses. Our CSR/sustainable procurement policy states that when making purchases, JSR will give sufficient consideration to legal and regulatory compliance, resource protection, environmental conservation, safety, human rights, biodiversity, and other factors that lead to a sustainable society. With suppliers understanding, and through communication, mutual understanding, and cooperation, we can continue engaging in effective initiatives. Based on Purchasing Policy and CSR/sustainable procurement initiatives implemented in FY2010, we surveyed the social and environmental considerations of our suppliers using a questionnaire. When an issue was detected, we dispatched the person in charge of procurement to the supplier to work on solving the issue together. We were able to survey the suppliers that represent 99% of our purchased materials by FY2013. We will continue to conduct the same process as we establish new suppliers in the future.
In addition, along with the globalization of the supply chain in recent years, issues such as forced labor, child labor, environmental destruction, global warming, corporate scandals, etc. have occurred, boycottes and improvement requests have come up. In response to the fact that major impacts are beginning to emerge, in FY2017 we revamped and expanded the questionnaire items used for investigation as follows. Currently, we have started a questionnaire survey which will be the second round using this revised questionnaire.

Partial addition in March 2018

<Questionnaires after revision>

Major item Sub item
Ⅰ. CSR Promotion System

1. Incorporation of CSR promotion in the company’s policies and code of conduct

2. CSR-promotion organization (promotion department and manager)

3. Company-wide system that promotes legal compliance

4. CSR initiatives that include suppliers

5. Public disclosure of the status of CSR promotion efforts

Ⅱ. Fair Corporate Activity

1. Prohibition of corruption and bribery

2. Prohibition of giving or receiving inappropriate favors or payoffs

3. Prohibition of abuse of superior position

4. Prohibition of anti-competitive conduct

5. Provision of accurate product and service information

6. Respect for others’ intellectual property rights

7. Import/export management

8. Prevention and early discovery of improper behavior

Ⅲ. Human Rights and Labor

1. Prohibition of forced labor

2. Prohibition of child labor

3. Prohibition of inhumane treatment

4. Prohibition of discrimination in terms of employment, promotion opportunities, treatment, etc.

5. Payment of fair wages

6. Management of work hours and non-work days

7. Respect for employees’ freedom of association and right to collective bargaining

Ⅳ. Environmental Conservation

1. Establishment and operation of an environmental management system

2. Management of chemical substances

3. Reduction of environmental burden

4. Reduction of GHG emissions

5. Resource conservation, resource recycling, and appropriate waste disposal

6. Conservation of water resources

7. Preservation of biodiversity

8. Disclosure of status environmental conservation initiatives

Ⅴ. Health and Safety

1. Safety measures for machinery and equipment

2. Workplace safety

3. Workplace health

4. Employee health management

5. Response to emergencies

Ⅵ. Information Security

1. Compliance with laws concerning information security

2. Protection against threats to computer networks

3. Prevention of personal information leaks

4. Prevention of leaks of the confidential information of customers and third parties

Additionally, our policy based on the above-mentioned Purchasing Policy is to never permit the use of conflict minerals, either directly or indirectly. We gain our business partners' cooperation in confirming that we use no conflict minerals.
JSR Engineering Co., Ltd., a JSR Group company responsible for construction work, communicates the policy of JSR Group to the Safety Committee organized by its subcontractors and asks their cooperation in our CSR/sustainable procurement initiative. CSR consciousness has been increasing among business partners, who also organize separate study meetings and discussions.

(2) Green procurement and purchasing

1. Green procurement of raw materials

JSR has long been committed to green procurement, a policy that puts the highest priority on goods with minimal environmental impact when purchasing raw materials. In response to the growing industry trend in managing chemicals in the supply chain, JSR joined the Joint Article Management Promotion-consortium (JAMP)*1 in October 2008, and reviewed of its Green Procurement Guidelines*2. JSR will continue to practice green procurement with an emphasis on disseminating information through the supply chain.

*1 The Joint Article Management Promotion Consortium (JAMP) was established as an inter-industry organization in September 2006 to support activities that aim to create and expand specific systems for the proper management of information on chemicals in articles (components, products, and so on) and to facilitate the disclosure and dissemination of information within supply chains. JSR conducts activities that contribute to the practice of these principles through its participation in JAMP.

*2 Green Procurement Guidelines:
JSR conducted a review of its Green Procurement Guidelines when it joined JAMP. Substances presently managed at JSR were coordinated with substances managed under the JAMP MSDSplus system, and the format was changed to MSDSplus. Also, the scope of green procurement was expanded from raw materials to include packaging materials and facilities. JSR is conducting green procurement with an emphasis on the dissemination of information so it can effectively manage chemical risks in its supply chains.

2. Green purchasing of office equipment and supplies

JSR defines green purchasing as the purchasing of environmentally friendly office equipment and supplies not directly related to its products or manufacturing. Green purchasing is distinguished from the green procurement of raw materials for products, packaging materials, and manufacturing facilities.
The Law Concerning the Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities (commonly referred to as the Green Purchasing Law) was enacted in 2000, and Japan's basic policy on the law was announced in 2001, when the law came into effect. Based on this policy, JSR strives to prioritize equipment and supplies with energy-saving features and high recycled content. In FY2016, green purchasing represented 95,812,000 yen out of a total of 119,640,000 yen in purchases at all business sites. This is equivalent to a green purchasing rate of 80%.

(3) BCM

We employ business continuity management (BCM) practices to manage resources to mitigate supply risk by having multiple suppliers. We also have a strict inventory management system in place based on business plans to prevent production from being halted in the event supplies of required raw materials temporarily run out.