Supply Chain Management
<CSR Procurement Policy>
“Our Commitment” states the principles of our conduct which we should adhere to in our business activities. The “Kuraray Group Code of Conduct” serves as guidelines to implement the commitment in performing day-to-day work, and we strive to fulfill our responsibility as a good corporate citizen. Kuraray established the “CSR Procurement Policy” in accordance with the 10 principles of the “United Nations Global Compact,” which are internationally accepted universal principles. In addition, to further promote respect for human rights throughout the Kuraray Group, we have formulated a new "Kuraray Group Human Rights Policy" in 2024. The items listed in the "CSR Procurement Policy" and the "Kuraray Group Human Rights Policy" are not only observed and implemented by the Kuraray Group, but are also shared with our suppliers, and we cooperate and work together with them as the basis of our purchasing transactions.
Kuraray is a signatory of the United Nations Global Compact.
CSR Procurement Policy
<Evaluating Suppliers Partners>
1. CSR procurement questionnaire
The Kuraray Group has identified “Improving supply chain management” as one of its material issues (materiality) Materiality of the Kuraray Group. Observing and practicing the “CSR Procurement Policy” along the supply chain will be one of the main targets. In order to ensure these efforts, we conduct a CSR Procurement Questionnaire to confirm the status of our suppliers’ efforts. Specifically, we will build and operate a system where we follow a cycle involving our suppliers of (1) spreading the Policy among them, (2) conducting a CSR procurement questionnaire, (3) analyzing and evaluating the survey results, and (4) giving feedback and supporting improvement as necessary. Through the process, Kuraray regularly monitor suppliers to mitigate risks and aim to ensure sustainable procurement. We will provide education and guidance on improvement through close communication with suppliers found to be especially in need of active support in improvement in the course of these activities. Furthermore, Kuraray will verify if and how often audits on suppliers will be necessary based on suppliers’ activities and status of improvement.
As a first step in this initiative, we conducted the CSR Procurement Questionnaire targeting major suppliers 1) of the Kuraray Group in Japan controlled by the Purchasing and Logistics Division in 2020. In 2022, we expanded the scope of our survey to include suppliers from each business division and affiliate in Japan purchases directly. In 2023, we select suppliers that account for 80% of the total purchasing value of the entire Kuraray Group, including overseas suppliers, and conduct a questionnaire survey of suppliers at each of the targeted overseas bases.
- 1)Suppliers covering 80% of total purchasing amount(90% of purchase value in raw materials, etc.)
The questionnaire reflects the Kuraray Group Code of Conduct and the 10 principles of the United Nations Global Compact. It covers 51 items in nine areas including respect for human rights, abolition of discrimination based on gender, nationality, etc., abolition of child labor, water resource issues, global warming countermeasures, environment pollution countermeasures, fair corporate activities such as preventing bribery and corruption, ensuring quality, information security, consideration for the supply chain, and harmony with local communities, among others.
CSR Procurement Questionnaire
Suppliers were asked to answer multiple choice questions on whether they have a system in place, and the status of improvement and confirmation for each item. We score each survey question on a scale of 3, 2, 1 or 0.
Results of the 2022-2023 CSR Procurement Questionnaire
Questionnaire response rate
| Number of target suppliers | Response rate | |
| Japan | 335 companies | 98.5% |
| Overseas | 304 companies | 85.5%* |
*As of the end of 2023. Including suppliers that used corporate reports prepared by suppliers as a substitute for responses to this survey.
Evaluation levels
| Evaluation | Score |
| A | 80% or above |
| B | 66%～80% |
| C | 50%～66% |
| D | Less than 50% |
In Japan, we started the survey in 2020 and conducted CSR Procurement Questionnaire to 335 companies in 2022. In 2023, we will also start a similar survey to disseminate our CSR Procurement Policy and CSR Procurement Questionnaire to 304 suppliers at our overseas bases, and have obtained the above response rate. To improve the content and quality of the survey, in 2022 we revised the questions and wording, added supplementary explanations to the questions, and created CSR Procurement Guidelines as specific items to be addressed in the CSR Procurement Policy, which were presented to suppliers together with the survey. We will continue to revise the questionnaire as necessary to make it easier to answer.
We evaluate the responses from suppliers based on the criteria in the table above and provide feedback to the entire company. In particular, we conducted web interviews and additional written questions with 14 Japanese suppliers and some overseas suppliers to confirm the status of their initiatives and share the purpose and importance of the Sustainability Procurement Program. The survey included D-rated suppliers and suppliers whose initiatives were deemed necessary to confirm. We asked suppliers whose efforts were found to be insufficient to make improvements. We received positive responses from all of them. As in Japan, we will provide feedback on the results to our overseas suppliers and request improvements when we deem their efforts to be inadequate.
Future plans
Also in 2024, we will coordinate initiatives that we previously carried out separately in Japan and overseas, putting a survey framework in place that covers business partners accounting for 80% of total Group procurement value, including overseas partners (90% in the case of raw materials, secondary materials, and products). This target, established under “PASSION 2026,” will help make the supply chain as a whole more resilient.
>Sustainable Procurement
2. Other surveys
The Kuraray Group conducts some evaluation per industry other than the above. For example, we have compiled a Warehousing Company Qualification Evaluation List covering criteria for newly selecting and continuing to evaluate third-party commercial warehousing companies in Japan. Based on the list, we audit warehousing companies in terms of location and facility, warehousing work environment, status of internal education, and other matters when newly appointing them and periodically after that. Initiatives are ongoing to give guidance on improvement when audit results do not satisfy criteria.
