Sustainability Management

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. In 2005, Kuraray established the “CSR Procurement Policy” in accordance with the 10 principles of the “United Nations Global Compact,” which are internationally accepted universal principles. However, changes in social conditions regarding supply chain management rendered the existing CSR Procurement Policy insufficient in some respects, and accordingly, it was revamped in 2019. While it goes without saying that the Kuraray Group itself will observe and practice the Policy, we will share it with our suppliers and ask for their cooperation in working on it together in 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 targets in the next Medium-Term Management Plan set out in fiscal 2021 and starting in fiscal 2022. 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 will regularly monitor suppliers to mitigate risks and 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 plans to verify if and how often audits on suppliers will be necessary based on suppliers’ activities and status of improvement.
As the first step for this initiative, we conducted the “CSR Procurement Questionnaire” targeting major suppliers 1) of the Kuraray Group in Japan 2) in 2020.

  • 1)Suppliers covering 80% of total purchasing amount
  • 2)Kuraray Group in Japan covers Kuraray Co., Ltd. and six manufacturing companies listed in the “Affiliated Companies (Japan)” page(https://www.kuraray.com/company/base/domestic).

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.

Response to the 2020 CSR procurement questionnaire and response rate

Number of target suppliers Number of suppliers who responded Response rate
223 companies 219 companies 98.2%

Future plans

Upon analyzing the survey results obtained this time, we will give our suppliers feedback on the results and carry out hearing of further details of their situation for providing support for improvement. By establishing the PDCA cycle and getting accustomed to it in cooperation with suppliers, the Kuraray Group strives to permeate the CSR Procurement Policy and improve the activities for CSR procurement throughout the supply chain together with our suppliers.

In the next Medium-Term Management Plan (2022-2026), the survey will gradually be expanded to suppliers of the entire Kuraray Group, including overseas companies in an effort to improve supply chain management of the Kuraray Group as a whole.

2. Other surveys
The Kuraray Group conducts some evaluation per industry other than the above. For example, we have compiled a “Warehouse company qualification evaluation list” covering criteria for newly selecting and continuing evaluation of third-party commercial warehouse companies in Japan. Based on the list, we audit warehouse 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.

Efforts on “White Logistics”

Kuraray endorsed the “White Logistics” movement in response to the request of the Ministry of Land, Infrastructure, Transport and Tourism and other organizations and submitted a Declaration of Voluntary Action on September 30, 2019. The “White Logistics” movement works on securing logistics needed for citizen life and industrial activities in a stable manner and contributing to economic growth by improving productivity in truck transportation and logistics efficiency as well as achieving a fairer work environment where everybody including women and drivers in their 60s can work comfortably in response to the intensifying shortage of truck drivers. To expand the movement, Kuraray shares the details of its Declaration of Voluntary Action on the “White Logistics” movement both internally and externally with business partners and works on empowering the movement to solve problems.

Kuraray’s Declaration of Voluntary Action on “White Logistics”

Kuraray endorses the “White Logistics” movement and declares to take the following voluntary actions mainly by reviewing its transportation mode and securing safety:

1.Proposals and cooperation in improving logistics: We are open to sincere discussions on improvement proposals from logistics companies.
2.Utilizing pallets, etc.: We will strive to mitigate cargo handling man-hours.
3.Consolidating storage locations: We will eliminate loading at multiple locations to reduce binding hours and improve efficiency.
4.Improving transportation efficiency: We will further expand our modal shift from trucks to ships and railways.
5.Avoiding congestion: We will avoid traffic congestion of the Port of Keihin.
(Switch the port of product export from our Kashima Plant from the Port of Keihin to the Port of Kashima)
6.Standardizing logistics systems: Provide shipping information online in advance to facilitate shipment arrangement.
7.Safety measures for cargo handling: We will improve the shipping and filling equipment for hazardous materials and review the procedure.
Kuraray Logistics Safety Conference holds a study group regarding ISO containers used to transport products made of hazardous materials (at Kashima Plant).