Sumitomo Chemical regards respect for human rights as part of the foundation for its business continuity. We are continuing to make a group-wide effort to address this as a material issue for management, and provide disclosures on our measures and progress. In order to accelerate its efforts on human rights, Sumitomo Chemical formulated the Sumitomo Chemical Group Human Rights Policy in April 2019, based on the Universal Declaration of Human Rights, the International Labor Organization Declaration on Fundamental Principles and Rights at Work, the Ten Principles of the United Nations Global Compact, and the United Nations Guiding Principles on Business and Human Rights. At the same time, we established the Human Rights Promotion Committee, a committee tasked with promoting our human rights initiatives. In order to pursue a group-wide effort to respect human rights, we are committed to ensuring that all Group companies in Japan and overseas are fully aware of the Human Rights Policy and take action on these principles.
Sumitomo Chemical Group Human Rights Policy (Effective April 1, 2019)
This policy was formulated based on the advice of outside human rights experts with practical experience.
Sumitomo Chemical Group (Sumitomo Chemical Co., Ltd. and its Group Companies) has put in place this Human Rights Policy (“Policy”) to demonstrate its commitment to international standards on human rights. All directors, executive officers and employees (“Personnel”) of the Sumitomo Chemical Group will uphold this Policy.
1. Our Position on Human Rights
- Compliance with Standards, Laws and Regulations
We support and respect international standards on human rights, such as the Universal Declaration of Human Rights, International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work, and promote respect for human rights in line with the United Nations Guiding Principles on Business and Human Rights. Sumitomo Chemical Co., Ltd. is a signatory to the United Nations Global Compact and supports its Ten Principles, which include human rights and labor.
We comply with applicable laws and regulations in countries and regions where we operate, and where local laws and regulations conflict with international standards, we will seek ways to honor the principles of internationally recognized human rights.
- Respect for Human Rights in Our Business Activities
We do not discriminate against individuals based on employment status, age, sex, ethnic or social origin, ancestry, nationality, disability, religion, beliefs, marital status, or any other status. We do not tolerate any form of harassment, including sexual harassment or workplace bullying. We also respect fundamental labor rights including freedom of association and the right to collective bargaining, and prohibit forced labor or child labor.
We are committed to respecting human rights in our business activities and also strive to avoid contributing to infringement of human rights. In order to prevent and mitigate human rights risks related to our business activities, we will take necessary measures, including ensuring compliance with the Compliance Manual (the Sumitomo Chemical Code of Business Conduct) and other relevant policies and guidelines. We are also committed to understanding our impact on local communities and aim for harmonious coexistence with these communities.
We expect our business partners, including our suppliers, and other relevant stakeholders to act in line with the principles in this Policy, and we will seek ways to work with them to promote respect for human rights.
2. Our Approach to Human Rights Issues
- Providing Education and Raising Awareness
We will provide appropriate education and training to our Personnel so that this Policy is understood and effectively implemented.
- Human Rights Due Diligence
We will identify adverse human rights impacts, and seek to prevent or mitigate such impacts though our human rights due diligence framework.
- Responding to Identified Human Rights Impacts
We will engage with relevant stakeholders in order to address actual or potential adverse human rights impacts.
Where we identify that we have caused or contributed to adverse human rights impacts, we will endeavor to remediate such impacts through appropriate processes.
- Grievance Mechanisms
We have grievance mechanisms in place in the form of the Speak-Up Reporting System (whistle-blowing channels) in order to address concerns about activities that may adversely impact human rights or any other concerns raised about our business activities. These channels are available for anyone having involvement in Sumitomo Chemical Group’s business activities, including their business partners as well as Sumitomo Chemical Group Personnel and their families. We will continuously seek to optimize our grievance mechanisms.
We will report on our efforts to respect human rights including through our website, integrated report, Sustainability Data Book, and other relevant channels.
Announcement of the Group Statement Based on Human Rights Laws and Regulations
We at the Sumitomo Chemical Group, as a globally operating corporation, have announced a group statement on our efforts to address risks related to modern slavery and human trafficking in our business activities and supply chain. This statement is based on laws and regulations in various countries with regard to respect for human rights and the prevention of modern slavery and human trafficking, including the Modern Slavery Act of the United Kingdom, the Modern Slavery Act of Australia, and the California Transparency in Supply Chains Act of the United States.
Human Rights Promotion Committee
Sumitomo Chemical has established the Human Rights Promotion Committee as its organization for promoting activities in compliance with the Human Rights Policy. In order to plan and implement measures to respect human rights across the entire value chain,*1 this committee consists of members from a broad range of related departments and functions. The senior executive officer in charge of corporate departments serves as chair, while from the business sectors, executive officers responsible for the Planning & Coordination Offices*2 of their respective departments participate as committee members.
- Value chain is defined by ISO 26000, which is an international standard related to social responsibility, as an “entire sequence of activities or parties that provide or receive value in the form of products or services.” See below for details.
- The Planning & Coordination Offices are departments in charge of matters related to the planning, technologies, and development of each business sector.
Human Rights Promotion Committee
Based on its basic policy for respect for human rights, Sumitomo Chemical continues to take various measures to promote respect for human rights by working closely with its Group companies in Japan and overseas, while also engaging business partners.
Overseas, in particular, we are working with our regional headquarters in Europe, the Americas, China, and the Asia-Pacific region to ensure and promote compliance, including initiatives to protect human rights, based on our compliance system that we have established in accordance with respective local legal systems of the countries where we operate.
Examples of Initiatives
Human Rights Due Diligence and Relief Efforts
With the aim of promoting respect for human rights in its business activities, the Sumitomo Chemical Group has established a system for human rights due diligence in accordance with the United Nations Guiding Principles on Business and Human Rights. Under our approach to evaluating, reducing, and preventing human rights risks, not only for Sumitomo Chemical itself and its supply chain, but also for Group companies in Japan and overseas and their supply chains, we set priorities based on potential human rights risks, and implement our efforts in steps. The Sustainability Department, Legal Department, Procurement Department, and Logistics Department collectively serve as our secretariat office for human rights due diligence, working with business sectors and other relevant departments to ensure that our entire value chain is assessed.
External specialists conduct human rights risk evaluations of the Group to evaluate, reduce, and prevent human rights risks within the Group.
Moreover, for the supply chain, we rank priorities based on assumed human rights risks, conduct surveys, and promote engagement. As a comprehensive initiative, we ensure the effectiveness of human rights risk reduction initiatives by including clauses related to the implementation of human rights-related initiatives in new and existing agreements. As a practical risk reduction initiative, we distribute The Sumitomo Chemical Group Supplier Code of Conduct* and collect responses to Check Sheets and human rights questionnaires, which independently confirm the status of initiatives by each supplier, thereby determining the status of general sustainability measures and management systems, including those related to human rights, at suppliers (supplier due diligence, hereinafter “supplier DD”). In addition, for suppliers of raw materials that have a high risk of having a negative impact on human rights (high-risk raw materials), we conduct high-risk raw material due diligence (DD) through surveys that track to the source.
If it is discovered through these activities that any negative impacts on human rights are occurring because of our Group’s business activities, or have been fostered by the Group’s business activities, we will redress or resolve those incidents through the appropriate procedures, in collaboration with related stakeholders.
- Reviewed the Sumitomo Chemical Group Sustainable Procurement Guidebook, revised and retitled the Sumitomo Chemical Group Supplier Code of Conduct in August 2022.
Human Rights Due Diligence Overview of Initiatives
Approach to Our Human Rights Due Diligence Efforts
Sumitomo Chemical Group Company Management
Sumitomo Chemical Group Company Management Flow
Initiatives in FY2022
Since it is important to regularly assess human rights risks in response to changes in social conditions and other factors, we conducted a human rights risk assessment (second round) for the Company and 131 consolidated management companies (as of October 2022). With the cooperation of outside human rights experts, we estimated potential human rights risks for each company based on the business activities, location (country/region), personnel composition, raw materials/products handled, and other factors of the group companies. We also confirmed the status of risk measures based on interviewing with personnel in charge and the results of internal audits and responsible care audits. Through these processes, we conducted an assessment more closely attuned to reality while maintaining objectivity.
Risk Evaluation Items
For this risk assessment, we first set the four categories of society, environment, occupational safety and health, and governance as major focal areas, and for each category, we determined items in detail for assessing risks. For example, in the category of “society,” we selected such diverse items as forced labor, child labor, discrimination, harassment, freedom of association, indigenous people, and cultural heritage. In other categories, we conducted risk assessment as to those items that we had addressed in audits, by examining them from a human rights perspective.
Policy for Calculating Risk Scores
Regarding each item, we confirm activities as factors either contributing to or reducing risk. When there are activities that could become risk factors, we add to the risk score, and when there are activities that reduce risk factors, we subtract from the risk score, thereby quantifying risk. The higher the risk score, the higher the human rights risk.
Examples that add to the risk score
- Employing foreign national workers and migrant workers
- Operational region of the Group company ranked as a high-risk country in indices published by international institutions
(for example: the Global Child Forum & UNICEF’s Children’s Rights and Business Atlas)
- Businesses considered labor-intensive (business categories considered to have a relatively high ratio of low-wage workers)
Examples that subtract from the risk score
- Confirming the personal IDs of migrant workers and storing copies
- Formulating policies related to prohibiting child labor
- Confirming the provision of employee wages in an amount adequate to provide for a family and meet basic needs, such as food and housing
Points Updated for the Second Round of Human Rights Risk Assessments
We considered the following factors to ensure that changes in social conditions are appropriately reflected.
- Country-specific indicators newly formulated and released by international organizations
- Among raw materials being handled, the presence or absence of materials that are considered to have high human rights risks, such as conflict minerals
- Problematic rises in cases of human rights violations in the chemical industry and in countries where Group companies are based
- The addition of the safety and health field to the ILO’s Core Labor Standards
FY2023 Initiative Plans
As a result of the human rights risk assessments, we conduct detailed investigations using written surveys and the input of outside human rights experts for Group companies that are considered to urgently need their status confirmed. We will confirm the facts and take remedial measures as needed.
Supply Chain Management
Supply Chain Management Flow
A. Introducing Human Rights Clauses into Contracts
In fiscal 2020, we have formulated contract provisions that request understanding of and cooperation with our efforts to respect human rights, and have begun including them in our contracts with our business partners, including raw material suppliers, materials and equipments suppliers, logistics providers, and contract manufacturers.
We will not only continue to sign contracts that include these human rights provisions, we will also respond in line with the procedures defined in these human rights provisions when negative impacts on human rights occur in our supply chain, or under the apprehension that such an impact has occurred.
B. Supplier DD
The Sumitomo Chemical Group is committed to building mutually beneficial and sound relationships with its business partners. We ourselves do business in a fair, equitable and transparent way, while also promoting sustainable procurement efforts across the entire supply chain with respect for human rights and a firm commitment to compliance. In order to encourage our business partners to work on sustainability efforts, in the Sumitomo Chemical Group Supplier Code of Conduct, we ask our business partners to respect human rights, prohibit complicity with human rights violations, prohibit discrimination and harassment, respect basic rights related to labor, prohibit forced labor and child labor, comply with the minimum wage, and assurance of a living wage. In addition, to accurately recognize the risk status related to legal compliance and ethics, society, occupational safety and health, and the environment in the procurement of raw materials in the supply chain, we send the Sumitomo Chemical Group Supplier Code of Conduct to our major business partners, collect the Sumitomo Chemical Group Sustainable Procurement Check Sheets filled out by each company, and confirm the status of initiatives.
Furthermore, from fiscal 2021, we are conducting detailed investigations of the Company's major business partners using questionnaires specialized for human rights (the human rights questionnaire). The human rights questionnaire comprises two parts: one for the management system of the entire company and one with questions specialized for human rights (the presence or absence of human rights risks and the implementation status of risk reduction measures). We provide feedback on the results for all business partners who respond. And for those business partners that we would like to take further action, we engage with them on an individual basis (including exchange information related to sustainability initiatives and share the best practices of the Sumitomo Chemical Group, providing support as needed).
Excerpts of the Human Rights Questionnaire
|Major items||Examples of specific questions|
Numbers of employees, presence of labor unions, status of formulation of policies (for example: human rights policies, legal and regulatory compliance, environmental conservation, occupational safety and health), supply chain management status (for example: status of risk assessments for business partners and the supply chain), establishment of whistleblower hotline
- We confirm a wide range of human rights issues, such as child labor, forced labor, discrimination (responsible recruitment), and the rights of indigenous people.
Initiatives in FY2022
Based on the fiscal 2022 survey results of the human rights questionnaire, we conducted engagement with major suppliers to gain their understanding of and cooperation on initiatives aligned with the United Nations Guiding Principles on Business and Human Rights. In addition, we revised the Sumitomo Chemical Group Sustainable Procurement Guidebook to further pro- mote sustainability initiatives, including those related to human rights, among suppliers. We amended the guidebook into the Sumitomo Chemical Group Supplier Code of Conduct, incorporating respect for human rights, prevention of complicity with human right violations, and assurance of a living wage.
FY2023 Initiative Plans
To confirm the status of initiatives in line with the Sumitomo Chemical Group Supplier Code of Conduct, we will continue promoting sustainable procurement in the supply chain by sending major suppliers the Sumitomo Chemical Group Sustainable Procurement Check Sheets and questionnaires specialized for human rights, collect responses, and take improvement measures as necessary.
C. High-risk Raw Material DD
The Sumitomo Chemical Group formulated the “Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials” in March 2020 to further promote efforts prohibiting the procurement of conflict minerals. Under the policy, the Group defines high-risk raw materials as those that having a high probability of negatively impacting human rights in the supply chain, including, but not limited to, tantalum, tin, gold, tungsten, cobalt, mica, graphite, and pulp. Depending on the characteristics of the high-risk raw materials, we promote initiatives aligned with the premise of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas (the OECD Guidance).
Initiatives in FY2022
From fiscal 2020, in line with the Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials, we conducted surveys of the usage status of high-risk raw materials at the Company and Group companies in Japan. As a result, we determined that we need additional confirmation for some of the raw materials source.
FY2023 Initiative Plans
Regarding some of the raw materials mentioned above, we will conduct additional confirmation. As a result of the confirmation, if there are concerns, we will consider remedial measures to reduce human rights risks in line with the Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials and continue implementing necessary initiatives. In addition, for business partners that handle high-risk raw materials, we will continue requesting reports based on the Responsible Minerals Initiative (RMI), steadily promote risk assessments, and consider rolling these efforts out to overseas Group companies.
We have grievance mechanisms in place in the form of the Speak-Up Reporting System (whistle-blowing channels) in order to address concerns about activities that may adversely impact human rights or any other concerns raised about our business activities. These channels are available for anyone involved in Sumitomo Chemical Group’s business activities, including their business partners as well as Sumitomo Chemical Group Personnel and their families.
In addition, regarding harassment in particular, Sumitomo Chemical has established a harassment consultation office and consultants. We have set up systems to provide consultations for employees regarding various types of harassment, including power harassment, sexual harassment, maternity harassment, and SOGI harassment.*4
Each of these aforementioned consultation offices accepts anonymous consultations and whistleblower reports. In the Compliance Manual, we make clear that the Company gives utmost consideration to protecting the privacy of the reporting person and maintaining the confidentiality of information provided and that the Company does not put people at any disadvantage, such as through dismissal, transfer, or discrimination, on the grounds of having received a consultation or made a report. We are raising awareness of these facts among employees.
Furthermore, at all aforementioned offices, in fiscal 2022, there were no confirmed cases related to discrimination and no major negative impact on human rights affecting the business continuation of the Group.
The Group will continue working to more effectively operate grievance mechanisms going forward.
- SOGI harassment: harassment related to sexual orientation and gender identity
Education and Awareness Raising
Our basic policy of respect for human rights is articulated in our Compliance Manual (Sumitomo Chemical Code of Business Conduct) and also communicated across through our intranet. In addition, our labor-management agreement makes it clear that an employee who damages the work environment for other employees through sexual speech and behavior, harassment, or other similar actions is considered violating our work regulations and thus subject to disciplinary action.
Under these principles, we value respect for an individual’s personality, prohibiting any action to disrespect or disparage an individual’s personality taken based on personal emotions or values or any harassment, bullying or similar speech or action.
We also prohibit all kinds of harassment, including power harassment and sexual harassment (including harassment of a person of the same gender and harassment of LGBTQ people regarding sexual orientation and gender identity).
In addition, we prohibit discrimination and do not allow any discriminatory action that is taken for reasons of employment type, age, gender, birthplace, ancestry, nationality, race, disability, religion, beliefs, marital status, or other such attributes and harms an individual’s dignity. We particularly make it clear that discrimination based on gender or a difference in sexual orientation or gender identity and discrimination against people with disabilities are prohibited.
Raising Employees’ Awareness of Human Rights
To ensure that each employee correctly understands and is fully aware of human rights issues, Sumitomo Chemical incorporates human rights in its employee education. We highlight human rights not only in the introductory training in which all employees participate after joining the Company but also in many other internal training programs, such as those for newly promoted employees (when promoted to a higher grade or a manager position) and those for recruiting interviewers.
In addition, we regularly implement awareness-raising training and initiatives at each site of our operations and each Group company.
Initiatives to Raise Awareness of Human Rights (Sumitomo Chemical Group)
|Name and format||Purposes||Boundary||FY||Sessions||Participants||Participation rate|
Seminars and lectures on human
||Sumitomo Chemical||2022||98||8,703 (cumulative total)||131.1|
Note: The participation rate is calculated as the cumulative total of participants.
We provided opportunities for all Sumitomo Chemical Group management executives and employees to learn about business and human
rights through a website specifically for the JIRI-RITA ACTION, which is aimed at helping employees promote sustainability.
A total of 25,000 people took courses offered on the website, where they learn about the Company’s policies and initiatives related to human rights issues, such as modern slavery by answering questions.
Engaging in Human Rights Initiatives
Stakeholder Engagement Program Hosted by Caux Round Table Japan
Since fiscal 2019, Sumitomo Chemical has participated in the Stakeholder Engagement Program hosted by Caux Round Table Japan, a non-profit organization, to better understand what circumstances can cause human rights issues and how business activities are related to human rights, as well as material human rights issues and the importance of considering human rights in business activities.
This program invites companies, non-government and non-profit organizations, and experts to discuss human rights due diligence that is required by the Guiding Principles on Business and Human Rights. The subject for fiscal 2022 was “Human Rights Issues by Sector” formulated by the Nippon CSR Consortium in fiscal 2021. Participants engaged in sectoral discussion, referring to the human rights guidance tool created by the United Nations Environment Programme Finance Initiative (UNEP FI). (We participated in the discussion for the chemical, construction material, and manufacturing sectors.)
Human Rights Due Diligence Subcommittee Hosted by Global Compact Network Japan
Since fiscal 2019, Sumitomo Chemical has engaged in the Human Rights Due Diligence Subcommittee hosted by the Global Compact Network Japan in order to promote human rights due diligence based on the Guiding Principles on Business and Human Rights.
In fiscal 2022, the subcommittee organized various initiatives such as seminars by experts and workshops related to human rights due diligence. We will continue to deepen our understanding of human rights by engaging in various initiatives, and leverage the learning in the Group’s human rights promotion efforts.
Signed onto the Declaration of Partnership Building
Sumitomo Chemical supports the premise of the “Council on Promoting Partnership Building for Cultivating the Future” promoted by Japan’s Cabinet Office and the Small and Medium Enterprise Agency and announced our Declaration of Partnership Building. This initiative aims to encourage the collaboration of large companies with small and medium-sized companies, promote measures to enhance productivity across the entire supply chain, and build mutually beneficial relationships between large companies and small and medium-sized companies. In its declaration, Sumitomo Chemical not only clarifies as one of its individual items that it will conduct trade in a manner that ensures fairness and transparency but also clarifies that it emphasizes human rights and compliance and is promoting sustainable procurement initiatives throughout the supply chain to enforce sustainability initiatives at suppliers.
Consideration for Human Rights in Investment
Along with interviews and legal due diligence for investment candidates, before acquisition we confirm consideration for human rights issues, response status, and the systems of investees.
Initiatives for the Rights of Children
The Sumitomo Chemical Group focuses efforts not only on eliminating child labor in Japan and overseas but also on educational support regarding respecting the rights of children.
We at the Sumitomo Chemical Group will observe our Human Rights Policy and work together as one to continue our efforts led by the Human Rights Promotion Committee to promote respect for human rights.