SocietySupply Chain Management

1. Philosophy

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 in the Elastomers Business, Plastics Business, Digital Solutions Business, and Life Sciences Business. The JSR Group Purchasing 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 our 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.

Additionally, as the supply chain becomes more globalized, issues such as forced labor, child labor, environmental destruction, global warming, and corporate scandals are coming to light. Boycotts and demands for rectification are also not uncommon. Developments such as these are beginning to have significant impacts on corporate activities. In response, we revamped and expanded the questionnaire items used for surveying CSR/sustainable procurement in FY2017. We are now conducting the second round of the survey using this revised questionnaire. Moreover, we understand that engaging in supply chain management in this way brings mutual prosperity to both JSR Group and our business partners. We therefore rearranged JSR Group’s desired compliance items appearing in the revised questionnaire and newly formulated a “JSR Group CSR/Sustainable Procurement Policy” in December 2018.

We are sequentially distributing the new policy to our business partners and asking them to make it known to their organizations and to practice it.

(2) Assessment of business partners

We regularly confirm that our business partners satisfy assessment standards that we demand. This confirmation takes place when beginning new business with a partner as well as during ongoing business with existing partners. When assessing candidates for new business, we evaluate them based on certain criteria concerning the status of their financial affairs and level of quality management. We also conduct an onsite audit prior to the start of business to verify items concerning safety, the environment, and quality. At the same time, we also reassess business partners with whom we have a continuing business relationship using similar criteria when starting a new transaction with them.
Some raw materials are difficult to procure in an emergency due to issues concerning availability or scarcity. For them, we strive to secure stable availability for our customers by conducting regular supplier audits, making onsite checks of matters having a bearing on supply continuity, and providing proposals and guidance for quality reliability.

(3) Initiatives concerning conflict minerals

Our policy based on the above-mentioned Purchasing Policy is to never permit the use of conflict minerals (tin, tantalum, tungsten and gold), either directly or indirectly. We work with our business partners to continuously verify that we use no conflict minerals. In FY2015, we conducted an investigation concerning the use of conflict minerals and confirmed that none of the targeted suppliers used them. Since then, we have investigated the use of conflict minerals when acquiring new raw materials or using a new supplier, and have maintained a system that guarantees we do not use conflict minerals. On the other hand, in recent years, there has been growing concern about human rights violations associated with cobalt mining, which is seen as a hotbed of child labor. In light of this, we plan to exhaustively investigate whether any problems exist with respect to cobalt (in addition to the conventional conflict minerals) in our operations. This investigation will make use of global standard templates provided by the Responsible Minerals Initiative (RMI)―namely, the Conflict Minerals Reporting Template (CMRT) and Cobalt Reporting Template (CRT).

(4) Education and training of employees in charge of procurement

We recognize that educating and training purchasing department personnel who promote CSR/sustainable procurement, deal with conflict minerals, and handle other actual operations are important for guaranteeing sound supply chain management. We therefore provide introductory education to new procurement personnel in purchasing departments to ensure that they fully understand the JSR Group Purchasing Policy. We also encourage them to acquire the Japan Management Association-accredited Certified Procurement Professional certification (CPP; a qualification certifying expertise in the purchasing and procurement field) to deepen their understanding of CSR/sustainable procurement and promote their acquirement of more advanced knowledge. We support them in this endeavor by paying the costs of workshops and examination fees.

(5) Participation in initiatives concerning CSR/sustainable procurement

JSR participates in Global Compact Network Japan’s Supply Chain Working Group. We utilize knowledge obtained through dialogues with stakeholders to strengthen our CSR/sustainable procurement activities. For example, we apply this knowledge when formulating the JSR Group CSR/Sustainable Procurement Policy and reflect it in questionnaire items used when surveying business partners.

3. Green procurement and purchasing

(1) Green procurement of raw materials

JSR has long been committed to “green procurement,” an approach 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 began formulating its Green Procurement Guidelines in 2000 and has been promoting environment-friendly "green procurement" based upon them. In 2008 JSR joined JAMP and revised the guidelines to bring its managed substances and format in line with JAMP MSDSplus. We again revised the guidelines during a switch from MSDSplus to chemSHERPA (a new format led by the Ministry of Economy, Trade and Industry for communicating information on chemical substances) in 2018. We will continue advancing green procurement with an emphasis on the dissemination of information so we can effectively manage chemical risks in our 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 FY2020, green purchasing represented 38,278,000 yen out of a total of 50,947,000 yen in purchases at all business sites. This is equivalent to a green purchasing rate of 75%.