Basic Stance

Policy on Sustainable Procurement

The Sumitomo Chemical Group is committed to building mutually beneficial and sound relationships with business partners. In addition to ensuring fairness, equitability, and transparency in our transactions with business partners, we are promoting sustainable procurement activities throughout the supply chain with an emphasis on compliance and respecting human rights, which will encourage our partners to also engage in sustainability initiatives. Furthermore, Sumitomo Chemical’s stance toward and policy on sustainable procurement is clarified in the Basic Procurement Principles and the Group Business Standards of Procurement, which provide guidelines for procurement operations for Group companies in Japan and overseas.

Basic Procurement Principles (Outline)

Sumitomo Chemical Group Policy for Responsible Procurement of Minerals / Raw Material (Established March 17, 2020)

Recognizing the principles set out in our Sumitomo Chemical Group Human Rights Policy, Sumitomo Chemical Group (Sumitomo Chemical Co., Ltd. and its group companies, hereafter “Sumitomo Chemical Group”) defines those raw materials that involve a high risk of having a negative impact on human rights in the supply chain (including but not limited to Tantalum, Tin, Gold, Tungsten, Cobalt, Mica, Graphite, Pulps etc.) as high-risk raw materials (“HRRM”).Sumitomo Chemical Group recognizes the adverse impact against human rights which may be associated with mining, extracting, refining, manufacturing, trading, handling and/or importing/exporting HRRM, and sets out the following Policy for Responsible Procurement of Minerals / Raw Materials. Sumitomo Chemical Group will comply with this policy, and requests all of its suppliers to acknowledge the contents of this policy and comply with it.

Management System

In line with the policy on sustainable procurement, we formulate and implement plans related to sustainable procurement, share these plans with Group companies. Furthermore, Sumitomo Chemical's stance toward and policy on sustainable procurement is clarified in the Group Business Standards of Procurement, which provide guidelines for procurement operations for Group companies in Japan and overseas. We are promoting relevant initiatives across the entire Group.

Goals and Results

FY2022 Group-wide Initiatives

Main Initiatives	Details
Group purchasing information exchange meeting  2 times	Participating companies: 24 Sustainability initiatives (respect for human rights, including high-risk raw materials, environmental conservation, etc.); Shared information about BCPs
Company-wide procurement liaison meetings  2 times	Participants: Representatives responsible for the procurement of business sectors Sustainability initiatives (respect for human rights, including high-risk raw materials, environmental conservation, etc.); Shared information about BCPs
Procurement staff education	Participants: All procurement staff (including new employees and transferees) Sustainability initiatives (respect for human rights, including high-risk raw materials, environmental conservation, etc.)

FY2022 Initiative for Suppliers

Main Initiatives	Details
Suppliers Dialogues 3 times	Participating companies: 42 (major suppliers of materials and equipment) Sustainability initiatives (respect for human rights, including high-risk raw materials, environmental conservation, etc.); Shared information regarding occupational safety
Supplier Information Exchange Meeting 1 time	Participating companies: 44 (major raw material suppliers) We explain the Company's efforts to reduce Scope 3*1 emissions to our major suppliers*2 and request that each such company cooperate with us in reducing GHG emissions and share related nformation. Provided briefings on and requested cooperation in sustainability initiatives (respect for human rights, including high-risk raw materials, environmental conservation, etc.), introduced on internal reporting systems, etc.
Evaluation of Established Suppliers (Sustainable Procurement Rate Survey)	Targeted companies: All established suppliers, who together account for the top 90% of the raw materials purchased Sustainable procurement rate*3: 91% (As of March 31, 2023)
Evaluation of New Suppliers	Due diligence rate for new suppliers: 100% Suppliers who were rated “good” and with whom business began: 100%
Audits	Number of times monitoring was conducted in conjunction with quality audits: 4 (Due to the pandemic, all audits were documentation audits. We confirmed that there were no problems on the sustainable procurement check sheets.)
Initiatives Related to High-Risk Raw Materials	We conduct due diligence in accordance with the Sumitomo Chemical Group Policy for Responsible Procurement of Minerals/Raw Materials. For conflict minerals (gold, tantalum, tungsten, and tin), cobalt, and mica, we request they use the template*4 issued by the Responsible Minerals Initiative (RMI), and, for other high-risk raw materials, we request they use a document based on the RMI. We have already received replies from all current suppliers of raw materials, including these high-risk raw materials. Reply collection status Conflict minerals, cobalt, and mica: 100% reply collection rate, 0% of suppliers have been determined to have a problem Other high-risk raw materials: 100% reply collection rate, we are engaging with some suppliers who need additional confirmation
Human Rights Questionnaire	We provided feedback to 10 companies surveyed in FY2021. We also conducted engagement*5 with five of those companies. We newly conducted a survey of 10 major domestic suppliers and have collected responses from all of them. We also assess the status of initiatives on human rights.

1. Emissions from the manufacturing and transportation of purchased raw materials
2. Covers suppliers accounting for 90% of procured raw materials and other items based on weight.
3. The percentage of Sumitomo Chemical Group Sustainable Procurement Check Sheets that were returned
4. • Conflict minerals (gold, tantalum, tungsten, tin): Conflict Minerals Reporting Template (CMRT)
   • Cobalt and mica: Extended Minerals Reporting Template (EMRT)
5. Exchanging information on sustainability initiatives, sharing best practices in the Sumitomo Chemical Group, supporting suppliers, etc.

Examples of Initiatives

• Sustainable Procurement Activities
• Sumitomo Chemical Group Sustainable Procurement Check Sheets
• Promoting Sustainable Procurement throughout the Supply Chain
• Initiatives Related to High-Risk Raw Materials
• Promoting Sustainable Procurement throughout the Group
• Supplier Information Exchange Meeting

Looking Ahead

In line with the Basic Principles for Promoting Sustainability, the Sumitomo Chemical Group will continue to strengthen cooperation with business partners and promote sustainability in the spirit of respecting human rights and ensuring compliance.

For Suppliers

Sumitomo Chemical believes that suppliers are important business partners and that it is only able to promote sustainability throughout the entire supply chain with the understanding and cooperation of suppliers. In connection with sustainability efforts for all suppliers, Sumitomo Chemical has compiled five categories in the Sumitomo Chemical Group Sustainable Procurement Guidebook. In this regard, Sumitomo Chemical would like to ask all of its suppliers to cooperate in fully understanding its Basic Procurement Principles, as well as to comply with this Guidebook.

Requesting Information

We would like to request information on, machinery/equipment, and raw materials for chemical products, as well as packaging materials, offered for purchase.
Please submit inquiry form.