CSR Procurement | Society | Sustainability | Asahi Kasei

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 environmental aspects including energy use, climate change, biodiversity, pollution, waste, and resource use, and social aspects 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 transparent purchasing practices based on regulatory compliance and respect for the environment and human rights.

Procurement Principles [Mission] Achieve trustworthy procurement that contributes to the sustainability of society and the sustainable growth of corporate value [Vision] Building 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.The Asahi Kasei Group Procurement Principles

Formulation of 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, in 2021 we formulated our Supplier Guidelines as a tool for promoting CSR procurement based on our Procurement Policy. In order for our suppliers to understand our policies, we have made our Procurement Policy and Supplier Guidelines available on the website, and strive to publicize our issuance of CSR procurement questionnaires. We will also monitor compliance through CSR assessments of our suppliers and cooperate to improve our management.

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.
As part of our supply chain management, we use the latest version of the UN Global Compact’s CSR/Sustainable Procurement Self-assessment Tool Set and disclose information in accordance with global standards.

Raising awareness of Procurement Policy and Supplier Guidelines among suppliers

To ensure that suppliers (buyers, etc.) 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. We are currently considering participation in supply chain-related initiatives and organizations.

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

Before commencing transactions with a new company, we conduct an evaluation which includes CSR through preliminary screening based on our Procurement Policy.

  • Confirm in advance whether the transaction is considered to be a subcontracting transaction:→ Submit sets of documents from suppliers and begin applications→ Explain preliminary screening details and confirm CSR procurement policy→ Preliminary screening→ Pass→ Begin transactions→ Periodic CSR procurement questionnaires to ascertain the status of initiatives and provide supportFail→ Additional screening→ PassFail→ No transactions
    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 encourage our ongoing suppliers to perform their business activities in line with CSR, we ask our major suppliers to complete a CSR procurement questionnaire in order to understand the status of CSR initiatives across the entire supply chain. In this way, we aim to improve the level of CSR by cooperating with our suppliers, and to avoid 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

FY2021 CSR Procurement Questionnaire Results

In fiscal 2021, we asked 105 of our major suppliers that had taken the survey in the past to complete the survey. Including overseas suppliers, we received responses from 101 suppliers.

Results of responses to our CSR Procurement Questionnaire

Rating Fiscal 2019 (Raw material suppliers) Fiscal 2020 (Material suppliers) Fiscal 2021 (Raw material suppliers)
A 54 (68%) 77 (41%) 79 (78%)
B 15 (19%) 67 (36%) 17 (17%)
C 6 (8%) 31 (17%) 3 (3%)
D 5 (6%) 12 (6%) 2 (2%)
Total 80 187 101

By category, results for Information Security, Labor, and Fair Corporate Activities were high, while results for Supply Chain and Harmony with the Local Community were relatively low.

  • 1. Corporate Governance87% 2. Human Rights87% 3. Labor91% 4. Environment84% 5. Fair Corporate Activities89% 6. Product Safety and Quality Assurance86% 7. Information Security92% 8. Supply Chain78% 9. Harmony with the Local Community76%
    Results of CSR Procurement Questionnaire (FY2021)

We actually visited several of our suppliers who received a D rating in the previous survey, or had them visit us, to 1) explain the content and purpose of the survey and 2) support them in making improvements in accordance with their circumstances, which resulted in an improved rating at those suppliers in the fiscal 2021 survey. We will continue to communicate with them in the future.
For suppliers ranked C and D in this questionnaire, we individually evaluated and analyzed all responses and risks to the supply chain, and are communicating with them as needed to regarding improvements based on our Group’s feedback.

In fiscal 2021, we provided guidance to five suppliers identified as at-risk in the previous year to help them address their issues, and conducted on-site evaluations of three suppliers. In total, we conducted assessments of approximately 10 suppliers over a two-year period.
If significant problems are detected during the screening, we hold discussions and such with suppliers as appropriate 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 2021, there were no suppliers where significant issues were detected.

  • Monitoring → Analysis and evaluation feedback → Plans for rectification and improvement → Follow-up
    Process flow for ongoing suppliers

Supplier environmental certification

In the questionnaire, we also surveyed the status of environmental management systems by acquiring a third-party certification system such as the international standard ISO 14001. We have currently confirmed that about 80% of our major suppliers (101 companies in total) have systems and mechanisms in place to promote environmental protection.

Training for Employees

To promote CSR procurement, Corporate Procurement & Logistics has been providing ongoing training to employees in procurement-related departments about CSR procurement in cooperation with the Sustainability Promotion Department and the procurement departments at subsidiaries and affiliates. In fiscal 2021, we conducted online training activities not only for the procurement division at our headquarters, but also for each region despite the COVID-19 pandemic.
The training details, trainees, and number of participants are as follows.

Training Content Summary of Training
Procurement Personnel Training (1) Explanation of the importance of CSR Procurement Target: Personnel in charge of raw materials, personnel in charge of materials
Frequency: Four lectures
Procurement Personnel Training (2) Explanations related to carbon neutrality from domestic and international perspectives Target: Personnel in charge of raw materials
Frequency: Two lectures
Lecture on Addressing Medium- and Long-term Issues (1) The direction of major sustainability initiatives in business units Target: Personnel in charge of raw materials, personnel in charge of materials
Frequency: Two lectures
Lecture on Addressing Medium- and Long-term Issues (2) Initiatives for carbon footprint of products Target: Personnel in charge of raw materials
Frequency: Three lectures
Personnel Training Training on the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors Target: Personnel in charge of raw materials, personnel in charge of materials
Frequency: One lecture (e-learning)

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 going forward.
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 Asahi Kasei 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.