Procurement
Examples of Initiatives
Sustainable Procurement Activities
Sumitomo Chemical has a webpage about sustainable procurement in the Procurement Information section on its official
website to inform more stakeholders of its sustainable procurement initiatives. The webpage features the Sumitomo ChemicalGroup Supplier Code of Conduct. Moreover, Sumitomo Chemical has formulated the Sumitomo Chemical Group Sustainable
Procurement Check Sheets to enable suppliers to conduct self-evaluations regarding all items. Suppliers can now download
these documents and report the results of their evaluations.
Sumitomo Chemical Group Sustainable Procurement Check Sheets
I Compliance and Ethics
Questions in this chapter focus on whether the company properly complies with laws and regulations; upholds and respects international norms; complies with competition laws; maintains sound relations with governments and administrative agencies as wellas prohibits bribery; prohibits the offering and receiving of inappropriate profit; respects intellectual property; establishes a system
for the prevention, early detection, and remedy of wrongdoings as well as protects whistleblowers; makes appropriate information
disclosure; protects the organization’s confidential information and personal information; and develops cyber security measures.
II Society
Questions in this chapter focus on whether the company properly respects human rights; prevents complicity in human rights
violations; prohibits all forms of discrimination and harassment; complies with laws and regulations regarding working hours,leave, etc. and labor agreements; respects the ILO standards; reduces excessive working hours; respects basic labor rights, including employees’ freedom of association and the right to collective bargaining; prohibits forced labor; prohibits child labor; gives
due consideration to young workers; complies with legal minimum wage requirements and gives due consideration to living
wages; establishes and implements a product quality management system; ensures safety of products and services; clarifies andcomplies with relevant laws and regulations, customer requirements, and internal quality control standards; properly manages
chemical substances and complies with relevant laws and regulations; makes appropriate information disclosure for products
and services; take proper measures in the event that an accident occurs or that a defective product should be shipped out;
advances efforts to reduce any negative impact on local communities and contributes to local communities; manages suppliers;
establishes a system necessary to ensure a stable supply of products and services; properly controls imports and exports; andresponsibly procures raw materials.
III Occupational Safety and Health
Questions in this chapter focus on whether the company properly establishes and implements an occupational safety and healthmanagement system; prepares emergency scenarios, including natural disasters and accidents, takes measures to improve
facilities, formulates manuals for emergency response measures, and provides awareness-raising and training programs ; assesses
safety and health risks, implements proper safety and health measures, and provides awareness-raising and training programs
regarding safety and healthy information; provides a safe and hygienic work environment; implements proper health management measures; and categorizes and records cases of occupational accidents and illnesses, provides necessary treatment, andconducts investigations, reports, and takes remedial measures.
IV Environment
Questions in this chapter focus on whether the company properly establishes and implements an environment managementsystem; properly controls and reduces chemical substances released to the environment; take measures to respond to climatechange, such as greenhouse gas (GHG) emissions reduction and adaptation to climate change; properly manages, reduces, andresponsibly treats and disposes of waste; sustainably and efficiently utilizes resources (energy, water, raw materials, etc.); andconserves biodiversity.
Sumitomo Chemical Group Supplier Code of Conduct

https://www.sumitomo-chem.co.jp/sustainability/files/docs/suppliers_code_of_conduct_e.pdf
Sumitomo Chemical Group Sustainable Procurement Check Sheets

https://www.sumitomo-chem.co.jp/english/sustainability/files/sustainable_procurement_checksheets_e.xlsx

1Procurement

Promoting Sustainable Procurement throughout the Supply Chain
We have every new supplier gain a better understanding of Sumitomo Chemical’s policies and stances through the Sumitomo
Chemical Group Supplier Code of Conduct. We also have them fill out and submit the Sumitomo Chemical Group Sustainable
Procurement Check Sheets. This enables us to do our due diligence regarding their compliance status, and, upon confirmation ofsatisfactory evaluation results, we begin doing business with them. Following that, we regularly monitor their compliance statusand strive to prioritize procurement from those suppliers who are working hard to ensure sustainable procurement. We manage
the data from the monitoring and periodically assess the content.
For suppliers whose initiatives have been determined to be insufficient according to their replies to the sustainable procurement check sheets, we furnish feedback, such as requesting confirmation of improvement plans, to raise awareness of and cooperation in ensuring sustainable procurement. Furthermore, for suppliers who have not shown improvement over the long termregarding important initiatives related to human rights and other issues, we designate them high-risk suppliers and offer more
focused feedback and monitoring.
In addition, we send out and collect the code of conduct and check sheets from our main suppliers of raw materials. Thecollection status is managed as our sustainable procurement rate.
■ System for Promoting Sustainable Procurement throughout the Supply Chain
Sumitomo Chemical
Monitoring and support

Sumitomo Chemical Group
Supplier Code of Conduct

Feedback on the report

Explaining the code of conduct items

Creating an improvement plan

Promoting sustainabilitySystem fordissemination and complianceSelf evaluation and reportingSuppliers (trading companies and manufacturers)

In addition to the initiatives above, from fiscal 2021, we have conducted detailed surveys of the Company’s major suppliers
through questionnaires specially focused on human rights (the human rights questionnaire). The questionnaires comprise twoparts, questions confirming the existence of company-wide management systems and questions specially focused on humanrights (the presence of human rights risks and the status of risk mitigation measures). We provide the results of the survey to allsuppliers who respond. We also conducted engagement with each supplier that we wish to see promote further measures on
an individual basis. This includes exchanging information on sustainability initiatives, sharing best practices in the Sumitomo
Chemical Group, and supporting suppliers.
Respect for Human Rights: B. Supplier DD2

Procurement

Initiatives Related to High-Risk Raw Materials
We formulated the Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials in March 2020. We
define high-risk raw materials as those that involve a high risk of having a negative impact on human rights in the supply chain(including but not limited to tantalum, tin, gold, tungsten, cobalt, mica, graphite, pulps, etc.). In line with the characteristics ofeach high-risk raw material, we promote initiatives aligned with the content of the OECD Due Diligence Guidance for Responsible
Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (OECD Guidance). In line with this procurement policy, we
designate high-risk raw materials and conduct due diligence.
In line with this policy, we extract data on all raw materials, including identified high-risk raw materials, from our internal
database and regularly confirm its accuracy for subject suppliers using templates issued by the Responsible Minerals Initiative(RMI) or documents based on said templates. If we determine there is a problem, we request improvements be made, and, if we
do not receive sufficient cooperation, we take appropriate measures, such as suspending procurement.
Respect for Human Rights: C. High-risk Raw Material DD

Promoting Sustainable Procurement throughout the GroupWe periodically hold Group purchasing information exchange meetings that gather together responsible purchasing
representatives from each Group company in Japan and overseas to discuss promoting sustainable procurement throughout
the Group. In addition, to ensure smooth communication, we set up a website with the Group companies to reciprocally share
information as we strive to promote and encourage sustainable procurement as a unified Group.
Supplier Information Exchange Meeting
Sumitomo Chemical regularly holds information exchange meetings with major suppliers and has introduced initiatives related
to the sustainability of the Sumitomo Chemical Group. We aim to help realize a sustainable society throughout the supply chain
by helping suppliers understand the Group’s policies related to procurement activities.

Looking Ahead
In line with the Basic Principles for Promoting Sustainability, the Sumitomo Chemical Group will continue to strengthen cooperation with business partners and promote sustainability in the spirit of respecting human rights and ensuring compliance.

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