Sustainable Procurement - Management System

Mission to create value
Policies
Promotion system
Co-creation with suppliers
Strategy for Realizing the Long-Term Vision
Training of Procurement personnel

Mission to create value

In order to realize a sustainable society with consideration for the environment and society, we will build long-term relationships of trust with our suppliers and conduct fair, impartial, and stable procurement activities in a responsible manner.

Policies

We are currently facing a range of social issues, including environmental problems such as the depletion of resources and energy issues as well as problems related to human rights, corporate ethics and compliance. Through its business activities and the provision of products and services, we have been striving to contribute to the solution of these social problems and to the creation of a global sustainable society.

We conduct business activities in a range of fields and as such have an extensive supply chain. In addition to making our own efforts, we therefore need to gain the understanding and cooperation of suppliers and other stakeholders for the implementation of the aforementioned initiatives.

Based on this recognition, we established the Resonac Group Sustainable Procurement Guidelines, which we share with our suppliers. By helping them to comply with the guidelines as a precondition for co-creation, we will increase corporate value on both sides while also contributing to the creation of a sustainable society.

Promotion system

Our sustainable procurement measures are managed and promoted by the SCM Division under the supervision of the Chief Manufacturing and Engineering Officer (CMEO) / Chief Quality Officer (CQO) with a focus on the following three items.

Corporate social responsibility (CSR): Better fulfill our social responsibilities in all our business activities from development/manufacturing to final consumption
Fair procurement activities: Select optimal suppliers and conduct fair procurement after comprehensively considering not only quality, safety, and economy, but also CSR
Partnerships: Build equitable collaborative relationships with suppliers based on mutual understanding and trust

To make these activities more robust, we have established a dedicated team within our Procurement Division to conduct internal monitoring of procurement, subcontracting, and legal/regulatory compliance, provide compliance-related education in-house, and conduct CSR surveys and provide feedback to suppliers, thereby playing a leading role in sustainable procurement.

Co-creation with suppliers

Our procurement departments are examining and implementing effective measures from the following viewpoint.

Ensure penetration of the Sustainable Procurement Guidelines by distributing them to suppliers and obtaining from the suppliers written confirmation that they have received them

We require all suppliers to comply with our Sustainable Procurement Guidelines and, upon being provided with copies of these Guidelines, suppliers are asked to submit written confirmation of their agreement with the Guidelines’ provisions.

Build a foundation for high-quality communication by improving methodologies for CSR questionnaire surveys and CSR visits, and help strengthen the businesses of both Resonac and its suppliers through open exchanges of opinions with suppliers

We ask new suppliers to fill out a CSR questionnaire when they start doing business with us and major existing suppliers to fill out a CSR questionnaire once every three years in order to raise awareness. We also conduct "CSR visits" to about 40 suppliers each year to communicate with them about their efforts with regard to the environment, human rights, compliance, and other issues.

For further details, please refer to Promotion of Sustainable Procurement

Strategy for Realizing the Long-Term Vision

Roadmap for 2030

Vision for the future (2030)	Issues to Be Addressed	Results in 2023	Plan for 2024
The supply chain functions efficiently, stably, and appropriately through globally controlled management frameworks and systems Practicing sustainable procurement in the form of responsible procurement activities based on a fair and open framework while holding high ethical standards	Issues to Be Addressed (long term) Establishment of a global governance framework and management system Sophistication of procurement and supply chain management methods and systems based on DX  Recent issues and problem awareness Raising the level of fairness and transparency in procurement operations by fostering compliance awareness throughout the Group Enhancement of communication with suppliers to step up collaboration	Enhanced communication with suppliers through CSR questionnaire surveys Gained insight into suppliers’ CSR efforts through CSR questionnaire surveys Set evaluation standards for suppliers 89% of suppliers had an overall score above the satisfactory threshold. For suppliers who did not meet this threshold, we formulated a dialogue plan aimed at improving their efforts through CSR visits and other means	Enhance communication with suppliers based on the results of CSR questionnaire surveys  Promote collaboration and improvement with suppliers facing issues  Expand implementation of CSR questionnaire surveys to overseas suppliers  Implement audits of procurement operations at Group companies (Japan + the Greater China)

Non-financial KPI Results and Targets

Resonac regards sustainability as the basis for its companywide strategies and has set three material issues for sustainability. Accordingly, for sustainable procurement, we will work on the non-financial KPIs and measures that were set to “Gain credibility through responsible business management” toward the achievement of our long-term vision.

KPIs on material issues	2025 targets	Results in 2023
Improvement of quality of communication with suppliers	Maintain a response rate of at least 90% for CSR questionnaires Improvement of the ratio of suppliers above the satisfactory threshold 85% or more (2028 target: 90% or more)	Introduction of a new survey tool to promote communication with suppliers. Questionnaire response rate: 91% Suppliers above the satisfactory threshold: 89%

Training of Procurement personnel

In practicing sustainable procurement, we believe it is important to improve the skills of those in charge of procurement through continuous education and awareness-raising activities and to encourage a sense of professionalism, and we conduct educational activities through various training and study sessions.

The wide range of topics covered include the concept of compliance, laws and regulations such as the Anti-Monopoly Act, the Subcontract Act, the Customs Act, the Foreign Exchange and Foreign Trade Act, and the Civil Code, as well as internal regulations such as procurement procedures and approval authority, with the aim being to improve the knowledge of procurement personnel at business units and plants. In 2023, a total of 3,570 Group employees participated in procurement-related training.