Approaches to sustainability
CSR Policy 1: Procurement
We will promote responsible procurement across the value chain.

Basic approach
In order to provide customers with products that can be used with peace of mind, it is essential to builda supply chain that enables stable sourcing of good quality and price competitive materials. By gaining
their long-term trust with suppliers through fair, impartial, and transparent transactions, we will
promote procurement activities that take into consideration resources, the environment, and humanrights, so that the entire supply chain will be able to grow sustainably.

T. Hasegawa Procurement Policy

1. Legal compliance and ethical transactions
We will observe laws and social norms in each country and region, and promote procurement
activities with high ethical standards and social good sense together with suppliers.

2. Considerations for human rights
We will respect human rights in every situation and endeavor to ensure that no activities that
may violate human rights are conducted across the entire supply chain so that there is nodiscrimination.

3. Considerations for the global environment
Together with all suppliers, we will conduct sustainable procurement activities that take into
consideration global environmental protection with an awareness on reducing theenvironmental impact.
4. Mutual trust, co-existence, and prosperity with suppliers
We will respect the standpoint of counterparties based on mutual trust according to theprinciples of fair and open competition, and seek to co-exist and achieve prosperity together
with all of our business partners, including suppliers.

5. Safety, security, and customer success
We will conduct procurement activities aimed at realizing customer success, safety, andsecurity by providing safe and quality products to customers and, in turn, consumers.

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Relation with stakeholders
In order to promote responsible procurement across the entire supply chain, we have established the “T.
Hasegawa Supplier Guidelines.” We will gain their long-term trust with suppliers through fair, impartial,
and transparent transactions.
Overview of T. Hasegawa Group suppliers
The Group does business with chemical manufacturers, flavor and fragrance manufacturers in the sameindustry, food additive manufacturers, food manufacturers, trading companies, contract manufacturers,and packaging material manufacturers. In FY2022, the total number of suppliers that the Company hadbusiness with was around 450, with a total number of 3,200 purchased items. The main breakdowns are
flavor and fragrance raw materials (natural and synthetic) and food (including food additives), whichhave the same percentage. The ratio of imports to domestic procurement is 35:65, and our suppliers arelocated in Japan, China, the United States, the European Union, the United Kingdom, India, Brazil,
Argentina, and other countries around the world. A distinctive characteristic of our suppliers is that they
engage in high-mix, low-volume production and offer raw materials with relatively high unit prices.
SDGs that we are targeting

Promotion system and governanceRaw material procurement is mainly promoted by the Purchasing Division. The Risk Management
Committee is a Group-wide organization that is chaired by the President & CEO and consists of directors
as members. It manages and verifies procurement-related risks. The Purchasing Division collects risk
information related to procurement and reports it to the Risk Management Committee.

Risks, opportunities, and strategies
Risks• Failure to procure flavor and fragrance raw materials derived from natural resources due to climatechange• Stagnation of business activities and loss of corporate value due to slow response to social andenvironmental issues in the supply chain
Opportunities• Enhancement of development and manufacturing capabilities and reduction of lead time throughdiversification of items and suppliers
Strategies• Implementation of global raw material procurement• Investigation and development of alternative raw materials• Sustainability survey and support for suppliers

Main FY2022 initiatives
While continuing to obtain the RSPO certification, we shared the T. Hasegawa Supplier Guidelines withsuppliers, obtained their understanding, and requested them to submit a written consent. At the sametime, we conducted a questionnaire survey using the CSR Procurement Self-Assessment Tool (Global18
Copyright© T. HASEGAWA CO., LTD. All rights reservedCompact Network Japan). In FY2022, the response rate of the written consent and questionnaire
accounted for 60% of the total transaction amount.
Implementation of supplier assessment
FY2022 survey
 Survey format: Questionnaire using the CSR Procurement Self-Assessment Tool
 Target: Top 89 suppliers in terms of the purchase amount, out of approximately 450 suppliers
 Response rate: 89% (79 companies responded) Results of response from 79 companies (Scoring percentage)
Corporate governance
Human rights

Local community

Supply chain

Labor

Information security

Environment

Quality/Safety

Fair corporate activities Trends, etc., based on the response:(1) Suppliers with a high scoring rate in corporate governance have built a sufficient CSR promotion
system and tend to score high points overall.
(2) Even if they have not developed a CSR promotion system, the companies generally scored highpoints in quality and safety, and it can be considered that they have implemented quality
management.
(3) Some suppliers that scored relatively high points had low scores in human rights and supply chain, so
human rights and supply chain management can be considered to be future issues, even forcompanies that have developed a CSR system to some extent.
We understand from the results of the questionnaire that there were no suppliers with significant risks
in terms of child labor or forced labor, or suppliers in which the freedom of association or the right ofcollective bargaining might be at risk.

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Procurement of certified raw materials
Based on requests from some customers, we purchase raw materials from Japan Good AgriculturalPractices (JGAP), ASIAGAP, or Rainforest Alliance certified farms.
Procurement of perilla oil
T. Hasegawa promotes the active use of distinctive flavor and fragrance raw materials in Japan aspart of its challenge to develop uniquely Japanese flavors. In order to procure perilla oil, which is
one such important flavor and fragrance raw material, we collaborate with a producers’ association
as described below to support stable production in terms of quality and quantity as well as forbusiness continuation.
 Provision of seeds: We provide seeds to producers every year for stable quality and yield of
perilla oil. With the cooperation of seed and seedling producers, we confirm the conditions ofproduction sites.
 Technical support: For improved productivity, we dispatch researchers and engineers to give
advice and support on production improvement and equipment modification. (*)
 Quality improvement support: We dispatch researchers to provide training and support for
quality inspection procedures that are difficult to learn only from a producers’ association.
 Supply of packaging, etc.: We provide containers for filling and packaging materials to aproducers’ association.
 Business continuity: We promote planned procurement for years ahead that will not significantly
increase or decrease the growing area, so that producers’ revenue will be stable.
(*)

Since it is difficult for the producers’ association to evaluate and design perilla oil extraction
equipment by itself when modifying it due to aging, we dispatched personnel who areresponsible for the equipment and an equipment contractor to carry out the modification in2021.

Plan for the future
From FY2023 onwards, we will further advance the supplier assessment, extract issues based on survey
results, and cooperate with suppliers to solve the issues together, thereby solidifying the relations withsuppliers and promoting sustainable procurement.
• We will continue to share the T. Hasegawa Supplier Guidelines with more suppliers.
• We will continue to request suppliers in the supply chain to promote sustainability.
• We will continue to request suppliers to answer questionnaire surveys using the CSR Procurement
Self-Assessment Tool from the Global Compact Network Japan.
• We will ask overseas subsidiaries to assess local suppliers.
Ratio of implementation of supplier assessment (plan)• FY2023: 70%• FY2024: 80%• FY2025: 90%

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