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. Towards that purpose, through supply chain management, we will respond to social issues together with our business partners.

JSR Group supply chain management has a unique feature for a chemicals company 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.

The JSR Group CSR/Sustainable 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’ and customers’ understanding, and through communication, mutual understanding, and cooperation, we will continue engaging in effective initiatives.

As part of this, we have practiced CSR/sustainable procurement since FY2010. Based on our Purchasing Policy, we conduct surveys of suppliers’ social and environmental initiatives with a questionnaire. If we find issues that need to be addressed, employees in charge of procurement visit suppliers in person to find the best solution. By FY2013, we were able to survey the suppliers that represent 99% of the value of our materials purchases. We will continue to conduct the same process as we establish new suppliers in the future.

Additionally, as the supply chain becomes more globalized, there is greater risk of forced labor, child labor, environmental destruction, corruption, and the like. In response, we revamped and expanded the survey questions in FY2017. We are now conducting the second round of the survey using this revised questionnaire.

Moreover, based on our belief that this kind of supply chain management benefits both JSR Group and our business partners, we newly formulated the JSR Group CSR/Sustainable Procurement Policy in December 2018. This policy sets out the items that JSR Group asks our business partners to comply with, as listed in the above revised questionnaire.

As this shows, sustainable business operations require continual supply chain management. To ensure that our suppliers know society’s expectations and JSR Group’s approach to them, we have been conducting initiatives since FY2021 to communicate the Group’s procurement and human rights policies and asking the same suppliers to return written endorsements of these policies. We are also holding a series of briefings and beginning specific actions to ensure that the entire Group, including Group companies in Japan and abroad, are working to the same ends.

• JSR Group CSR/Sustainable Procurement Policy

JSR Group confirms that our business partners conform to assessment standards that we demand. This happens when starting business with a new partner as well as during ongoing business with existing partners. When assessing potential new business partners, we evaluate their financial status and quality control and conduct onsite audits of safety, environmental, and quality concerns before starting trade. We also reassess business partners with whom we have a continuing business relationship following the same criteria as when starting new trade.

Some raw materials are difficult to procure in an emergency due to poor 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 offering suggestions and guidance for quality reliability.

Our stance based on the JSR Group Purchasing Policy is to never permit the use of conflict minerals (which tin, tantalum, tungsten, or gold could potentially be), 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, in FY2021 we determined 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 Extended Minerals Reporting Template (EMRT). Because this investigation too will be done throughout the Group, we will first hold briefings for Group companies in Japan and abroad. We will then identify any raw materials that use or contain the minerals of interest, then distribute the templates to suppliers of such materials and make sure they reply.

JSR Group educates and trains employees in charge of procurement on the subject of CSR/sustainable procurement and conflict minerals initiatives to make sure we are practicing sound supply chain management. This includes introductory education to personnel newly assigned to purchasing departments to ensure that they fully understand the JSR Group Purchasing Policy.

To encourage employees in charge of procurement to obtain more advanced knowledge, we recommend that they acquire the Japan Management Association-accredited Certified Procurement Professional certification (CPP; a qualification certifying expertise in the purchasing and procurement field) to promote their acquiring of more advanced knowledge. We support them in this endeavor by paying the costs of workshops and examination fees.

JSR Group participates in Global Compact Network Japan’s Supply Chain Working Group, where we utilize knowledge obtained through dialogue with stakeholders to strengthen our CSR/sustainable procurement activities. Recently, we have applied this knowledge when formulating the JSR Group CSR/Sustainable Procurement Policy and revising the questions on the questionnaire used to survey business partners.

JSR Group established green procurement guidelines in 2000 and has practiced green procurement, which is to say, preferentially purchasing goods with minimal environmental impact. In response to the growing industry trend of managing chemicals in the supply chain, JSR Group joined the Joint Article Management Promotion-consortium (JAMP)* in 2008 and reviewed our guidelines so that chemicals under control and our formats would support JAMP MSDSplus.

Then in 2018, we revised our guidelines again to reflect the transition from MSDSplus to chemSHERPA, a new chemical information transfer format established under the leadership of the Ministry of Economy, Trade and Industry. We currently practice green procurement in keeping with these guidelines. We will continue to actively pursue green procurement with an emphasis on information transfer to ensure that there is effective chemical risk management in the supply chain.

* 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, molded goods, 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.

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.

In Japan, 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. Japan's basic policy on the law was announced in 2001, when the law came into effect, and has been revised multiple times since then. Based on the most recent version of this policy, JSR strives to preferentially purchase equipment and supplies with energy-saving features and high recycled content. In FY2021, green purchasing represented 62,700,000 yen out of a total of 73,655,000 yen in purchases at all business sites. This is equivalent to a green purchasing rate of 85%.