Sustainable procurement

At Idemitsu Kosan, we aim for the sustainable development of society and the company by conducting fair and impartial procurement based on appropriate procurement ethics, contributing to improving business competitiveness, and conducting honest management for all stakeholders. Masu. To achieve this purpose, we have established a basic procurement policy and general regulations regarding procurement activities.

The environment surrounding companies is diversifying, and in order to achieve sustainable development, each company is expected to actively work to fulfill its social responsibilities not only by one company but throughout the entire supply chain. Masu. Our group has established a basic procurement policy based on Management Philosophy and Action Mindset, and through procurement activities based on Integrity ethical standards, we work together with our business partners to create a "society that is capable of sustainable development" throughout the supply chain. In order to fulfill this responsibility, we have adopted the international standards ISO 26000 (Guidance on Social Responsibility), ISO 28001 (Supply Chain Management Systems) and ISO 20400 (Guidance on Sustainable Procurement), SDGs (Sustainable Development Goals), and the 10 principles of the United Nations Global Compact. For reference, we have formulated our own sustainable procurement guidelines from the perspectives of 1) organizational governance, 2) human rights, 3) labor practices, 4) the environment, 5) fair business practices, 6) consumer issues, and 7) social contribution. We exchange information with our business partners regarding the status of their sustainability initiatives and strive to improve our mutual performance.

Our group has established a basic procurement policy based on Management Philosophy and Action Mindset, and through procurement activities based on Integrity ethical standards, we aim to co-create a "society capable of sustainable development" throughout the supply chain with our business partners. Based on the Sustainable Procurement Guidelines, the procurement department plays a central role in working closely with business partners.

In promoting sustainable procurement, we have specifically established policies for selecting procurement partners when purchasing or borrowing materials, construction work, and services necessary for our business, and we have established policies for selecting procurement partners regarding our procurement activities. By helping people understand this, we aim to contribute to the realization of a sustainable society throughout the supply chain.

In building a healthy supply chain through sustainable procurement activities, we believe that true "dialogue" based on basic relationships of trust with business partners is extremely important.
Regarding dialogue with a series of business partners, we are proceeding with the following steps as shown in the diagram below.

In the first part, each business partner will conduct a self-assessment based on the self-assessment sheet, which will lead to early detection and response to emerging risks. After that, we will proceed with direct dialogue, with a view to unearthing potential risks, if necessary.
In this dialogue, from the perspective of sustainable procurement, we discuss the causes of identified issues beyond the positions of the ordering and receiving parties, and take actions for improvement. Both sides have confirmed this.
In fiscal 2022, we expanded the scope to 10 major purchasing departments ^* and conducted sustainable procurement self-assessments for 270 business partners. In fiscal 2023, we will continue to hold dialogues with business partners who have already conducted self-assessments.

As part of our procurement activities, we communicate at in-house study sessions that we will fulfill our social responsibilities throughout the supply chain through collaboration with our business partners. Furthermore, when selecting new business partners, we follow the Sustainable Procurement Guidelines.

We strive to deepen mutual understanding by communicating our thoughts on our sustainable procurement and basic human rights policies. Specifically, from the perspective of "defending against computer network threats," we are making improvements such as sharing our Cyber Security Letter with business partners who have requested it and establishing a supply chain reporting desk. . Additionally, as needed, we support companies in resolving issues, such as providing templates for creating various regulations and providing in-house education on biodiversity.