Social

Supply Chain Management
Basic Procurement Policy
The Toyoda Gosei Group has set a Basic Procurement
Policy based on the concept of coexistence andco-prosperity with our suppliers. We aim to deepen

our partnerships with suppliers while achieving
sustainable growth for both of us.

Basic Procurement Policy
1. Globally Optimized Procurement
We procure the optimum raw materials,products, and equipment fairly from a global
perspective, taking into consideration cost,quality, technology, and production.
We also welcome proposals from suppliers
for new technologies, manufacturingmethods, and new products.

2. Mutual Development Basedon Mutual Trust
We aim to enhance the collective strengthof the Toyoda Gosei Group based on open
and fair relationships with our suppliers,
mutually strengthening our corporate
structures, innovating our management,
and building relationships of mutual trust.

3. Efforts for a Sustainable Society
Toyoda Gosei has established action
guidelines on social issues to be addressed,
including the SDGs, and shares theseguidelines with suppliers in carrying out
initiatives.
We also aim to ensure complete legal
compliance and confidentiality in corporate
operations, including our supply chain.

Our Supply Chain and Global Expansion
We directly deal with 421 suppliers for products andparts, 327 suppliers for materials and equipment, anda total of 773 suppliers including other suppliers inJapan and overseas.
As our business expands globally, we are collaboratingwith purchasing managers in each region, taking into
consideration all aspects of quality, cost, risk
avoidance, and other factors. Global procurement

liaison meetings are held twice a year to share
information and engage in dialogue to resolve issues
related to sustainability initiatives in addition to QCD(quality, cost, and delivery).

Suppliers(number ofcompanies)

Products &parts

Materials &equipment

OtherTotal

421

327

25773

Business with New Suppliers
We have an entry form on our website for open
dialogue regarding new proposals and new businessdealings. In addition to QCD assessments at the startof new business dealings, we also check the status of
the other party’s management initiatives based on theirlevel of support for our sustainability guidelines andother factors, and at the same time, we explain thevarious guidelines we have developed and seek theirunderstanding when concluding various contracts andmemorandums of understanding.

Initiatives with Suppliers
Sustainability Initiatives throughout the Supply Chain
We have created the Supplier Sustainability Guidelines(2nd Edition) for the purpose of ensuring theunderstanding, dissemination, and implementation of
our sustainability initiatives by suppliers. These
guidelines set policies related to human rights, labor, theenvironment, compliance, and other matters. In addition
to social aspects (including eliminating child labor,
forced labor, and discrimination, and ensuring equal
opportunity, reductions in long working hours, andcompliance with minimum wage laws), the guidelines
also require compliance with environmental aspects
such as water use and biodiversity by suppliers.
With regard to the environment, our Green
Procurement Guidelines require suppliers to reduce
CO2 emissions, recycle resources including waste, andmanage chemical substances. For conflict minerals,

66

we ask suppliers to be responsible in theirprocurement of resources and raw materials, and oncea year, we conduct a survey on conflict minerals withthe cooperation of all suppliers.
As described above, we are accelerating initiatives
needed for sustainable growth over our entire supplychain, matched to the various changing socialconditions.

Conducting self-assessments of suppliers in accordance with the Supplier
Sustainability Guidelines revised in March 2023

About Toyoda Gosei

Value Creation Story

Value Creation Strategy

Foundation of Value Creation

Data

Implementing Carbon Neutral Initiatives in the Supply Chain
To achieve our goal of carbon neutrality throughout ourentire supply chain, we started joint initiatives with oursuppliers in 2021.
We started CO2 emission reduction initiatives in 2022
after holding presentations and gaining anunderstanding of the current situation for recognizing
the issues faced by individual suppliers. In addition to
study sessions at the Energy Saving Dojo where
Toyoda Gosei’s energy-saving expertise is exhibited,support for measurement of actual energy usage, andvarious training sessions to prepare reduction themes
and implement reduction initiatives tailored toindividual suppliers, we also held the Carbon Neutral(CN) Initiative Conference in September 2023. About

120 participating companies brought together
examples of reductions and issues they have faced
over the past year, and group discussions by industry
sector were held for sharing issues. We will continue to
implement carbon neutral initiatives in cooperation
with our suppliers.

CN Initiative Conference held in September 2023. 122 participants from 118
companies attended, including those who participated via the Web.

Strengthening Our Partnerships with Suppliers
Every April, we hold procurement policy briefings
where we explain our management philosophy, thebusiness environment, and company policy to about
250 major suppliers in Japan, share our issues andtargets, and regularly confirm results and discuss
improvements through anticipated value roundtables.
In addition, starting in FY2019, we have designatedDecember of each year as Supplier Month as anopportunity to express our gratitude and respect toour suppliers and to listen to their honest opinions withhumility, and we aim to build better relationships with
our suppliers by presenting them with letters ofappreciation to express our gratitude for their daily
efforts.
We also hold procurement liaison meetings six times ayear to introduce examples of initiatives and share
information, and to hold seminars on social issues
such as carbon neutrality.
Since FY2020, we have established a Management
Troubleshooting Consultations Office for managers inour suppliers for receiving inquiries from them on
various management issues, and we strive to provide
consultations for those issues and advise them onhighly effective solutions.

Support for Suppliers So That We Can Grow Together
To support our suppliers, we implement various
initiatives from the perspective of safety, sustainability,quality, cost and production. No matter what the case,
we are implementing these initiatives in association
with human resource development support, such astransfer of our own skilled workers or accepting corepersonnel from our suppliers. In addition, we provide
indirect support for the initiatives of the Kyowa-kai,
which is organized by suppliers for the purpose of
mutual study and horizontal deployment of bestpractices, and from 2022, the Winning (Value)
Technology Exhibition has been hosted by the Kyowakai with the aim of strengthening the competitivenessof both parties by utilizing suppliers’ accumulated

knowledge to enhance the added value of ourproducts.
In 2023, we also began to leverage the strengths ofboth parties by sharing information on our problems(needs) and the proposals (seeds) of the Kyowa-kai.

The Winning Technology Exhibition
held in September 2023. About
1,100 visitors attended the exhibitionof various “value techniques” fromparticipating companies.

Monitoring of Supplier Information
We request suppliers with whom we have ongoingtransactions to submit a supplier survey sheet
covering management information at least once a year,
and we strive to quickly resolve risks and solve
problems by visiting and interviewing suppliers

regarding major changes.
Also, we conduct supplier evaluations, including QCD,
to sort out the strengths, weaknesses, and challengesof each company before considering the details oftransactions.

T OYODA GOSEI REP OR T 20 2367