Evaluation of Suppliers

Activities in 2023

CSR questionnaire surveys

Each year we ask about 450 business suppliers to fill out the CSR questionnaire surveys regarding the Resonac Group Sustainable Procurement Guidelines and thereby self-check their CSR activities. We ask major business suppliers to do it once every three years and all new suppliers to do it when starting business with us. In 2023, the total response rate came to 91%.

This CSR questionnaire survey is positioned as an important communication tool for building close and fair cooperative relationships with suppliers, and is utilized for appropriate risk management such as identifying risks and planning countermeasures in the course of pursuing our business by ascertaining the progress made in initiatives taken by suppliers.

In 2023, we conducted the CSR questionnaire survey using a new tool that helps us improve feedback and communication with suppliers, thereby strengthening our cooperation.

Further, in 2023, we changed the details of the questionnaire survey, which now includes the nine items shown below. Responses for each of the nine items are scored, and suppliers are asked to make improvements for items with low scores. Also, we conduct separate discussions with suppliers whose overall average score is below the benchmark and propose improvements to raise the level collectively achieved by our suppliers as a whole.

Results of CSR questionnaire surveys made in 2023
(average score percentage by item)

CSR visits

We visit around 40 suppliers each year and have visited a total of 400 suppliers over the last decade. We engage in dialogue with the suppliers to check their CSR activities and introduce them to some examples of our excellent CSR activities. In 2023, we visited 36 suppliers and found no serious cases of human rights infringement or noncompliance for these companies.
If a noncompliance is detected concerning a supplier, we will discuss with the supplier and implement necessary measures for early improvement. We will also review our business relations with suppliers who we think do have a serious negative impact on our business continuity. According to the level of negative impact that might be caused by a supplier, we will stop requesting quotes from and placing orders with the supplier for a certain period, reduce the trade volume, or cancel the sales contracts concluded with the supplier. We will decide whether to resume transactions with the supplier or not after our Procurement personnel check how the supplier has made improvements by interviewing the supplier and confirm that our concerns about the negative impact have been mitigated or eliminated.

Follow up

We score the CSR measures taken by suppliers who completed the CSR questionnaire survey and those to whom we made CSR visits. We then send feedback reports to each of the survey respondents in which we clearly indicate how they performed against the total average and industry average. We conduct the questionnaire survey to assess risks related to suppliers once every three years, targeting all products and services purchased, in principle.

Total average score for the 2023 CSR questionnaire surveys and measures taken for improvements

Number of suppliers respondent: 392 companies, average score 73.4 points
(Sent a feedback report (including a comparison with the total average score and industry average score, and requests for improvements) to each of the respondent companies)

	Number of cases	Rate	Measures for improvements
70 and higher	241	61%	Requested improvements for the items for which problems were identified while working to further enhance CSR activities.
From 40 to below 70	111	28%	Requested improvements for the items for which problems were identified while working to further increase the scores for the items with high scores. Moreover, proposed improvement measures. *Made visits as required to exchange views about each other’s measures. Will check the status of improvements in the next round of self-assessments.
Below 30	40	11%	Requested improvements for the items for which problems were identified and proposed improvement measures. *Made visits as required to discuss measures for early improvements. Will check the status of improvements in the next round of self-assessments.