CSR Procurement
Policy
It is the policy of the Asahi Kasei Group to consider suppliers as important partners and to treat them with sincerity.
Our Mission and Vision for procurement are an expression of our ideals to apply in daily activities as we work to uphold our Procurement Policy and promote procurement practices with an emphasis on CSR.
Accordingly, we consider suppliers from an environmental aspect, including energy use and climate change, biodiversity, reducing pollution and waste, and efficient use of resources, and also from a social perspective, including discrimination, equal opportunity, freedom of association, and compliance with local laws concerning working hours and wages.
A relationship of mutual trust with our suppliers is fostered through fair and principled purchasing practices based on regulatory compliance and respect for the environment and human rights.
![Procurement Principles [Mission] Contributing to the Asahi Kasei Group's value creation and sustainable growth through reliable procurement and logistics [Vision] Building a strong and a sustainable supply chain for the Asahi Kasei Group [Basic Policy] 1. Compliance, We uphold all laws relevant to purchasing transactions as well as the Asahi Kasei Group’s internal regulations. 2. Fairness and impartiality, Selection of bids and conclusion of contracts are performed in a fair and impartial manner. 3. Open door principle, We provide fair opportunities to any potential supplier, both domestic and overseas. 4. CSR-focused procurement, We perform purchasing in close coordination with our group-wide activities for CSR. 5. Partnership, We strive to deepen mutual understanding and build relationships of trust with suppliers.](/sustainability/social/scm/images/index-img-01.png)
The Asahi Kasei Group Procurement Principles
Supplier Guidelines
We conduct business activities in various countries and regions around the world, and are expected to address social issues to achieve a sustainable society, including measures against climate change and respect for human rights, not only within the Asahi Kasei Group but throughout the entire supply chain as well.
For this reason, we formulate our Supplier Guidelines as a tool for promoting CSR procurement based on our Procurement Policy. In order to help our suppliers understand our Group’s policies, we have made them available on our website together with our Procurement Policy, and strive to publicize them when requesting CSR procurement questionnaires. We will also monitor compliance through CSR assessments of our suppliers and cooperate to make improvements.
Management Framework
Corporate Procurement & Logistics is responsible for the Asahi Kasei Group Procurement Policy, and the department cooperates with the Sustainability Strategy Planning Department to familiarize Group company personnel with the content.
In fiscal 2022 we established a Supply Chain Sustainability Promotion Group within Corporate Procurement & Logistics to strengthen CSR procurement activities in procurement and logistics functions. In addition, in light of recent changes in the procurement environment, we are promoting activities with the following system regarding supply chain management.
Supply Chain Management Framework
Participation in the Declaration for Partnership Building system
In 2022, Asahi Kasei endorsed the Declaration for Partnership Building in support of the Council for Promoting Partnership Building to Open Up the Future, promoted by the Cabinet Office, the Small and Medium Enterprise Agency, and other organizations.
In our declaration, we have specified the following:
- We agree with the purpose of the White Logistics Movement, and based on our voluntary action declaration, we are working to improve logistics based on mutual understanding and cooperation with suppliers, logistics operators, and other related parties.
- We have established Supplier Guidelines in an effort to promote understanding and initiatives among our suppliers in areas such as human rights, labor, health and safety, the environment, and ethics.
- We continue to provide in-house training on the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors.
We will continue to aim to build new partnerships by promoting collaboration, co-existence and co-prosperity with our business partners in the supply chain.
In addition to the Asahi Kasei Group, Asahi Kasei Homes, Asahi Kasei Pharma, and Asahi Kasei Medical have also announced their endorsement of the Declaration for Partnership Building.
Raising awareness of Procurement Policy and Supplier Guidelines
To ensure that suppliers are familiar with our Procurement Policy and Supplier Guidelines, we strive to raise awareness by disclosing them on the website and asking them to complete our CSR procurement questionnaires. In fiscal 2022, we held an online briefing session for 59 suppliers newly applicable to the CSR procurement questionnaire, during which we also explained our Procurement Policy and Supplier Guidelines.
Evaluation of CSR at suppliers
The Asahi Kasei Group is working with its suppliers to promote CSR procurement with the aim of constructing a sustainable supply chain.
We conduct supplier surveys as part of our CSR procurement from two perspectives, 1) evaluation at the commencement of new transactions and 2) ongoing evaluation of suppliers.
Approach to new suppliers
When we start doing business with a new supplier, we evaluate, including from a CSR perspective, whether or not we can do business with them after conducting a preliminary screening based on our Procurement Policy.
Process flow for new suppliers
If significant problems are detected during the preliminary screening, we encourage suppliers to make improvements as soon as possible. If subsequent screenings do not confirm that the issues have not been rectified, business dealings may not be possible.
Approach to ongoing suppliers
To ensure that our suppliers continue to carry out their business activities aware of their corporate social responsibilities, we conduct and disclose the results of CSR procurement questionnaires using the latest version of the UN Global Compact's CSR Procurement Self-Assessment Tool Set. In this way, we are improving the level of CSR by cooperating with our suppliers, and avoiding environmental and social risks in the supply chain.
Question categories
- 1. Corporate governance related to CSR
- 2. Human rights
- 3. Labor
- 4. Environment
- 5. Fair corporate activities (ethics and compliance)
- 6. Product safety and quality assurance
- 7. Information security
- 8. Supply chain
- 9. Harmony with the local community
FY2022 CSR Procurement Questionnaire
In fiscal 2022, we asked 216 of our major material suppliers to complete a questionnaire, and received responses from 214 companies. The suppliers that responded account for approximately 80% in terms of contract value of the material suppliers that do business with the Corporate Procurement & Logistics Department.
(The Asahi Kasei Group considers suppliers of equipment and construction-related work to be material suppliers)
Number of responses and results to our CSR Procurement Questionnaire
| Rating | Raw material suppliers | Material suppliers | ||
|---|---|---|---|---|
| FY2019 | FY2021 | FY2020 | FY2022 | |
| A | 54(68%) | 79(78%) | 77(41%) | 119(56%) |
| B | 15(19%) | 17(17%) | 67(36%) | 60(28%) |
| C | 6(8%) | 3(3%) | 31(17%) | 28(13%) |
| D | 5(6%) | 2(2%) | 12(6%) | 7(3%) |
| Total | 80 | 101 | 187 | 214 |
By category, results for Labor, Fair Corporate Activities, Product Safety and Quality Assurance, and Information Security were high, while results for the Environment, Supply Chain, and Harmony with the Local Community were relatively low.
Results of CSR Procurement Questionnaire (FY2022)
The Asahi Kasei Group sends out feedback sheets to those suppliers who have responded to our CSR Procurement Questionnaire. In addition, for suppliers that received a C or D rating, we visit them or conduct online interviews to confirm the situation and offer support for improvements.
If significant problems are detected as a result of the talks, we exchange ideas with the supplier and encourage them to make improvements as soon as possible. If follow-up screenings do not confirm that the issues have been rectified, we will consider halting or reviewing business dealings.
In fiscal 2022, we conducted interviews with 43 suppliers (38 material suppliers and 5 raw material suppliers) who received a C or D rating in the fiscal 2020 questionnaire (material suppliers) or the fiscal 2021 questionnaire (raw material suppliers). However, in fiscal 2022, no significant issues were discovered with any of our suppliers.
Interviews with the remaining five companies that were rated C or D in the fiscal 2020 questionnaire (materials suppliers) were completed in fiscal 2021 with no significant issues confirmed.
For suppliers ranked C and D in the fiscal 2022 questionnaire, we individually evaluated and analyzed all responses and risks to the supply chain, and are communicating with them as needed regarding improvements based on our Group’s feedback.
Process flow for ongoing suppliers
Supplier environmental certification
In the CSR procurement questionnaire, we also surveyed the status of environmental management systems by acquiring a third-party certification system such as the international standard ISO 14001. Approximately 80% of our major raw material suppliers (out of 101 companies) in the fiscal 2021 questionnaire and approximately 70% of our major material suppliers (out of 214 companies) in the fiscal 2022 questionnaire have systems and mechanisms in place to promote environmental protection.
Training for Employees
To promote sustainability activities, Corporate Procurement & Logistics has been providing ongoing training to employees in procurement-related departments about sustainability in general in cooperation with the Sustainability Promotion Department and the procurement departments at subsidiaries and affiliates. The details of training activities in fiscal 2022 are as follows:
| Training | Content | Summary of Training |
|---|---|---|
| Procurement Personnel Training (1) | Supply chain risk management | Target: Personnel in charge of raw materials Participants: 19 |
| Procurement Personnel Training (2) | Promoting initiatives on human rights issues | Target: Personnel in charge of raw materials, personnel in charge of materials Participants: 159 |
| Lecture on Addressing Medium- and Long-term Issues | General knowledge regarding sustainability and Asahi Kasei's sustainability | Target: Personnel in charge of raw materials, personnel in charge of materials, personnel in charge of logistics Participants: 115 |
Communication with stakeholders
Safety seminars are periodically held at our principal production sites to discuss accident prevention and exchange information with suppliers.
We also actively engage in close communication with our suppliers by actually visiting them, or having them visit our offices, to inform them about sustainability-related trends and promotional activities, as well as to exchange views. We will continue to enhance mutual communication, improve safety, and promote sustainable procurement.
The Asahi Kasei Group compliance hotline also accepts reports and inquiries from suppliers.
Response to conflict minerals
It is a global trend that more and more countries are banning the procurement of minerals from inhumane armed groups, particularly in the Democratic Republic of the Congo and neighboring countries. In the US, this is required by the Dodd-Frank Act of 2010.
The Group considers conflict minerals to be a serious issue, and our policy is to ensure transparency in our supply chains and to procure minerals responsibly. We do not obtain, procure, or utilize minerals from armed groups, and avoid supporting conflict and inhumane activities.
2022 Initiatives
In fiscal 2022, we sent a request to our suppliers to investigate all of the 20 raw materials we procure to see if any fall under conflict minerals (tantalum, tin, tungsten, gold, cobalt, and mica). As a result, we were able to confirm that all of the raw materials we procure are not conflict minerals.