With Suppliers

Goals and Achievements of Major Initiatives

Objective of initiatives Goals for fiscal year 2017 Achievements in fiscal year 2017 Evaluation Goals for fiscal year 2018
Promote CSR procurement • For raw materials used in core businesses, work with suppliers to minimize CSR procurement–related risks.
• Examine CSR procurement assessments of suppliers in the PRC more carefully with the goal of uncovering issues in the supply chain and implementing corrective measures together. Share information with the Sun Chemical Group.
• Based on CSR procurement questionnaire responses in Japan, discuss corrective measures with suppliers having low self-assessment scores.
For raw mater ials procured in Greater China, to confirm suppliers’ ability to respond to environmental regulations, measures focused on implementing on-site inquires at key suppliers of raw materials used in core businesses and requesting corrective measures. Information derived was shared with the Sun Chemical Group. ★★ For raw materials procured in Greater China, minimize procurement–related risks by closely inspect ing the responses to environmental regulations and implementing countermeasures to address issues.
For companies overseen by DIC Asia Pacific and DIC (China), use version 2 of the DIC Group Supply-chain CSR Deployment Guidebook to once again advance awareness of CSR procurement, prioritizing key raw materials in core businesses. DIC Asia Pacific and DIC (China) worked with local companies to conduct on-site inquiries at suppliers in their respective regions (two in the Asia–Pacific region and two in Greater China) with the aim of fostering awareness. ★★ For suppliers of raw materials used in core businesses that are based in the Asia–Pacific region, implement detailed inquiries to gain a solid grasp of risks, thereby ensuring procurement stability, from the perspective of business continuity.
  • Evaluations are based on self-evaluations of current progress. Key: ★★★ = Excellent; ★★ = Satisfactory; ★ = Still needs work

Basic Approach to Sustainable Procurement

Having recognized the increasing importance of addressing global issues related to human rights, climate change and water risk, among others, as social imperatives, the DIC Group promotes socially responsible procurement practices. To ensure its extended supply chain functions in a socially responsible manner, the DIC Group established the DIC Group Universal Purchasing Policy, based on which it also formulated purchasing management regulations, in 2008 and the DIC Group CSR Procurement Guidelines, which clarify issues it expects suppliers to address, in 2009. Using the policy and guidelines, the Group promotes CSR procurement across its supply chain by ensuring that all suppliers implement improvements and initiatives necessary to ensure the sustainability of Group procurement. Group companies in Japan, the Americas and Europe, Greater China and the Asia–Pacific region collaborate to ensure sustainable procurement on a global basis.

DICグループのCSR調達に向けた取り組み

The DIC Group Universal Purchasing Policy

Guided by an action policy established to realize the DIC Group’s basic sustainable procurement principles, the Purchasing Department adheres to the following guidelines in dealing with suppliers:

  1. Fair and transparent business practices
    The DIC Group will implement fair and open purchasing activities with suppliers based on global perspectives, without the constraints of conventional commercial customs.
  2. An appropriate purchasing process and building of relationships of mutual trust
    The DIC Group, as a good partner for suppliers, will build long-lasting, mutually trusted relationships with suppliers and work together with them for mutual harmony and benefit, while complying with relevant regulations/social norms, domestic and overseas, and pursuing adequate quality and prices.
  3. Satisfying environmental/safety needs
    The DIC Group will take responsibility as an exemplary corporate citizen for environmental affairs, occupational safety, human health and product quality, always take into account changes in society and implement environment-friendly purchasing activities
  4. Challenging to the creation of a new value
    In order to respond at a high level to a new value sought by society, the DIC Group will proactively challenge the creation of such value together with suppliers, with whom the same goal can be shared, and strive to grow together with them in a sustainable manner.

The DIC Group CSR Procurement Guidelines

  1. Compliance with laws and social norms
  2. Respect for human rights and consideration for work environments
  3. Safety and hygiene
  4. Promotion of sound business management
  5. Consideration for the environment
  6. Information security
  7. Appropriate quality and safety and improved technologies
  8. Flexible attitude to ensure stable supplies and respond to change
  9. Contribution to local communities and society
  10. Promoting CSR and deploying it in the supply chain

Encouraging CSR Procurement

Based on the DIC Group Universal Purchasing Policy, and incorporating requirements contained in guidebooks put out by external organizations including the Japan Electronics and Information Technology Industries Association (JEITA), DIC formulated the DIC Group CSR Procurement Guidelines, a series of requirements pertaining to ESG-related imperatives, including the management of chemical substances in and reduction of the environmental impact of raw materials, as well as respect for human rights across its entire supply chain. With the aim of compelling suppliers to observe these guidelines, the DIC Group conducts assessments and on-site inquiries in accordance with the DIC Group Supply-chain CSR Deployment Guidebook. (Version 2 of the guidebook was published in July 2013.) In addition to obliging suppliers to ensure the stringent management of chemical substances through the DIC Group Green Procurement Guidelines, the Group entreats suppliers to develop and release products that have less of an impact on the environment and promote green procurement themselves, as well as to lower the environmental impact of materials they procure, and of the packaging, transport, production and engineering thereof, by trimming resources and energy used in, decreasing the weight and expending the useful life span of, and reducing CO2 emissions from such materials. Such measures have proven effective in strengthening the Group’s relations with suppliers.

The DIC Group Green Procurement Guidelines

In line with the DIC Group Universal Purchasing Policy, DIC formulated the DIC Group Green Procurement Guidelines, which prohibit the procurement of materials containing hazardous substances in seven categories*1. The guidelines mandate the submission of a DIC Raw Materials Survey, an SDS and a chemSHERPA*2, as well as a DIC Group Green Procurement Guidelines Survey, when purchasing raw materials, thereby creating a system for eliminating substances of concern. Submission of a Conflict Minerals Survey is also required.

  • *1(1) Substances the production of which is prohibited, as outlined in Article 55 of Japan’s Industrial Health and Safety Act; (2) Substances designated as class 1 specified chemical substances in Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.; (3) Substances designated for monitoring under Japan’s Act on the Evaluation of Chemical Substances and Regulation of Their Manufacture, etc.; (4) Chemical substances the production of which is already prohibited, as detailed in Japan’s Act on the Protection of the Ozone Layer Through the Control of Specified Substances and Other Measures (ozone-depleting substances listed in the Montreal Protocol); (5) Specified particulates denoted in Japan’s Air Pollution Control Act; (6) Specified poisonous substances indicated in Japan’s Poisonous and Deleterious Substances Control Act; and (7) Specified substances detailed in the Stockholm Convention on Persistent Organic Pollutants.
  • *2chemSHERPA is a scheme designed to facilitate the accurate and efficient sharing of information on chemical substances in products across the entire supply chain. DIC began using chemSHERPA in late fiscal year 2017.

Supplier Self-Evaluations

In accordance with version 2* of the DIC Group Supply-chain CSR Deployment Guidebook, the DIC Group asks suppliers to complete questionnaires, which it uses to ascertain the status of suppliers’ CSR procurement practices. The questionnaire further segments the Group’s 10 procurement guidelines into 46 issues, including green procurement, acquisition of ISO 14001, consideration for human rights and the work environments, and promoting CSR procurement to secondary suppliers.

  • *Version 1 of the DIC Group Supply-chain CSR Deployment Guidebook was published in 2009 in Japanese, English and Chinese. Version 2, published in July 2013, includes new sections on conflict minerals and biodiversity, added in response to changing social imperatives.

Analyzing the Results of Questionnaires

Feedback sheet
Feedback sheet

Assessment Distribution Chart (682 Suppliers)
Assessment Distribution Chart (682 Suppliers)

From November 2013 through December 2016, the DIC Group conducted assessments for 682 suppliers using version 2 of the DIC Group Supply-chain CSR Deployment Guidebook, accounting for 90%-plus of its procurement spending. The Group analyzed and assessed questionnaire responses, providing feedback to all 682 suppliers and requesting corrective measures for significant issues through on-site inquiries or written comments.

Conducting On-Site Inquiries

From fiscal year 2011 through fiscal year 2017, the DIC Group conducted on-site inquiries for 70 suppliers. The objective of these inquiries is to help suppliers further their understanding of CSR. In an on-site inquiry, the Group and the supplier confirm the responses provided by the supplier in the assessment questionnaire. Other efforts include introducing examples of Group initiatives designed to advance CSR procurement and realize sustainability.

Global Procurement Initiatives

In fiscal year 2017, DIC and regional headquarters in the PRC and the Asia–Pacific region cooperated to conduct on-site inquiries for 12 suppliers in core businesses in the PRC based on the suppliers’ CSR procurement assessment responses. DIC also worked with these suppliers to fortify understanding of issues related to local environmental regulations, and of environmental issues in the supply chain related to local legal and regulatory compliance, as well as to request corrective actions. Information on these on-site inquiries was shared at a global procurement conference with Sun Chemical.

VOICE

DIC’s efforts to build win–win relationships with suppliers has enabled it to realize sustainable procurement.

My job is in the purchasing of materials for DIC Group companies in Greater China. I have gained extensive know-how in the area of CSR through in-house training, among others, and have been actively involved in promoting CSR among suppliers. One of the biggest challenges has been finding an easy-to-understand way to explain the need for CSR to suppliers, because it is not easy to fully grasp actual initiatives based on responses to supplier self-evaluation questionnaires. In fiscal year 2016, we conducted on-sight inquires for six suppliers in Greater China. While the standards for these inquiries centered on traditional concerns, namely, quality, cost and delivery, we explained to suppliers the need to give consideration to ESG in advance and secured their understanding. We also exchanged opinions with suppliers regarding CSR initiatives. When we discovered particularly outstanding initiatives being implemented by suppliers, as well as when we felt suppliers’ understanding of CSR fell short, we introduced DIC initiatives as case studies. This has allowed us to build win–win relationships with suppliers that I am confident will underpin sustainable growth for all concerned going forward.

Group Purchasing, DIC (Shanghai) Co., Ltd.   Kevin Ke

Group Purchasing,
DIC (Shanghai) Co., Ltd.
Kevin Ke

VOICE

We are promoting CSR procurement by conducting on-site inquiries for major suppliers.

I currently work in the Purchasing Department in the area of raw materials procurement. With the aim of realizing sustainable procurement, we periodically conduct on-site inquiries for suppliers of principal raw materials. Actually going to the supplier gives one a much clearer idea of the supplier’s initiatives than can be gained simply by reading questionnaire responses. One company I visited was taking steps to illuminate legal and regulatory risks and had established study groups to explore issues related to compliance and the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, allowing me to see firsthandthe importance the company placed on compliance initiatives. I also inspected the company’s production facilities, giving me the opportunity to observe its stringent process control systems and BCP measures, including dividing production among multiple facilities. This process enabled us to deepen our relationship with this particular supplier.

Assistant Manager, Purchasing Department Miho Hayashi

Assistant Manager,
Purchasing Department
Miho Hayashi

VOICE

On-site inquiries help build trust and understanding.

I accompanied off cials when they conducted on-site CSR inquiries at the importers that I am in charge of and verif ed the results of CSR procurement assessments submitted by those companies. I initially had no idea what sort of CSR initiatives I might f nd—after all, trading houses are not manufacturers. In fact, all of the importers I visited maintain CSR programs as a key component of their corporate policy. Exchanging opinions with suppliers on assessment results helped enhance mutual understanding and I found the opportunity to see different perspectives on CSR, particularly in areas such as quality control and supply stability for imported materials, especially useful.

Manager, Purchasing and Logistics Division Toshio Yamagami

Manager, Purchasing and Logistics Division
Toshio Yamagami

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