JSR Corporation regularly confirms that our business partners conform to our procurement assessment standards. 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 as needed 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 conduct regular audits, making onsite checks of matters having a bearing on supply continuity, and offering suggestions and improvements for quality reliability.

JSR Corporation has been pursuing sustainable procurement initiatives since fiscal 2010. By fiscal 2013, it had completed its first CSR/Sustainable Procurement Survey of business partners that, together, accounted for approximately 99% of the total purchasing value. Subsequently, considering risks associated with the globalization of supply chains (such as forced and child labor, environmental destruction, and corruption), we updated the survey in FY2017. In FY2022, we surveyed our business partners with the revised version. We also feed the results back to each of our business partners. In addition, we provide assistance with re-qualification surveys and advice as needed at the time of quality audits.

To ensure that JSR Group shares the intent of its CSR/Sustainable Procurement Policy and Human Rights Policy, we ask each of our business partners to submit a Statement of Endorsement of these policies. As of the end of FY2022, 90% of our business partners had submitted their Statements of Endorsement. We are continuously striving to improve the collection rate of Statement of Endorsement by encouraging our overseas business partners, whose submission rates are relatively low, to submit statements to us.

In accordance with the OECD Due Diligence Guidance and the RMI framework, JSR Group continues its initiatives to confirm the non-use of minerals (tin, tantalum, tungsten, gold, cobalt, and mica) likely to be involved in human rights abuses. Using RMI's CMRT (3TG) and EMRT (cobalt and mica), we collect information from applicable business partners to verify that the materials are sourced through smelters that demonstrate their responsibility through RMAP compliance or other means. In fiscal 2022, JSR Group collected responses from 88% of the total number of surveyed business partners and confirmed that the respondents either do not use the corresponding minerals or procure them from responsible smelters with no relevant issues. We will continue to encourage some of our business partners who have not cooperated in the collection to understand the purpose of this initiative and to respond to us, and we will continue to promote the continuous collection rate.

JSR Group aims to manage chemical substances throughout the supply chain to minimize risks that chemical substances pose to human health and the environment.*1 In terms of our procurement of raw materials, we have been taking initiatives in green procurement, which prioritizes the purchasing of raw materials with low environmental impact, in line with the Green Procurement Guidelines that we established in 2000. Furthermore, in line with the growing industry trend of managing chemicals in the supply chain, we joined the Joint Article Management Promotion-consortium (JAMP)*2 in 2008 and conformed operations to the JAMP MSDSplus management format. In 2018, we revised our guidelines to comply with chemSHERPA (a new format for communicating chemical substance information developed at the initiative of the Ministry of Economy, Trade and Industry). We continue to practice green procurement based on the latest list of hazardous substances. To effectively manage the risk of chemical substances in our supply chain, we will continue to engage actively in green procurement with an emphasis on communicating information with our business partners.

1. *1Chemical Substance Management
2. *2Joint Article Management Promotion-consortium (JAMP): Established in September 2006 as a cross-industry organization to advance cross-industry activities for the purpose of properly managing information on chemical substances contained in articles (components and molded products) and facilitating the broader establishment of a concrete system for smooth disclosure and communication in the supply chain. JSR conducts activities that contribute to the practice of these principles through its participation in JAMP.

Separate from its green procurement of raw materials for products, JSR Group is also committed to eco-conscious purchasing of office equipment and supplies that are not directly related to manufacturing. In Japan, we give priority to the purchase of products with high energy efficiency and recycled content, referring to the latest basic policy of the Act on Promoting Green Procurement. In FY2024, the green purchasing rate at our domestic business sites was 89% (68,057,000 yen out of 76,744,000 yen in purchases). We will continue to strive to maintain and improve our high standards.