With Suppliers

Goals and Achievements of Major Initiatives
Basic Approach to Sustainable Procurement
Ascertaining and Improving Suppliers’ Sustainability
Human Rights Due Diligence in Supply Chains
Responsible Procurement of Minerals
Advance Assessments of New Raw Materials
Ensuring the Sustainable Procurement and Use of Raw Materials
Internal Configuration and Employee Training

Goals and Achievements of Major Initiatives

Promote sustainable procurement.

Goals for fiscal year 2023	Advance initiatives aimed at expanding sustainable procurement over the medium to long term, including assessing and reducing CO₂ emissions associated with raw materials and searching for bioderived and recycled raw materials.
Achievements in fiscal year 2023	In Japan, the CO₂ emissions reduction targets of key suppliers were assessed and steps were taken to promote awareness of the need for related initiatives. Assessments of CO₂ emissions associated with raw materials were conducted, information was collected from suppliers and themes for future assessments were identified. In addition to bioderived materials, research was conducted regarding target raw materials for which the mass balance approach has been adopted, including bionaphtha, and markets for these raw materials, and information was shared across the Group in preparation for introduction.
Evaluation	★★
Goals for fiscal year 2024	Advance initiatives aimed at expanding sustainable procurement over the medium to long term, including evaluating the CO₂ emissions reduction targets and promoting awareness of the need for improvements, assessing CO₂ emissions associated with raw materials, and searching for bioderived and recycled raw materials.

Goals for fiscal year 2023	Continue conducting sustainability assessments of suppliers in Japan and Sun Chemical suppliers, and expand the scope of this initiative to include the PRC and the Asia– Pacific region, to ensure a grasp of, and encourage improvement of, suppliers’ sustainability initiatives.
Achievements in fiscal year 2023	Sustainability assessments of suppliers were conducted in Japan and at Sun Chemical. Furthermore, the EcoVadis platform, used by Sun Chemical, was deployed across the DIC Group, with the goal of reinforcing initiatives. Assessments using this tool commenced in Japan.
Evaluation	★★
Goals for fiscal year 2024	Continue conducting sustainability assessments of suppliers in Japan and Sun Chemical suppliers using the EcoVadis platform or another tool and promote related efforts across the DIC Group by expanding the scope of this initiative to include the PRC and the Asia–Pacific region.

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 issues essential to sustainable procurement, including compliance with laws and social norms, consideration for the environment and respect for human rights, the DIC Group formulated the DIC Group Universal Purchasing Policy and continues to advance related initiatives on a global scale. Based on this policy, the Group also established the DIC Group Sustainable Procurement Guidelines, which clarifies its expectations of suppliers, and advances sustainable procurement across its supply chains by ensuring assessments are conducted to ascertain the status of suppliers’ sustainability and by encouraging awareness-raising efforts.

The DIC Group Universal Purchasing Policy

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.
An appropriate purchasing process and the 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.
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.
Challenge the creation of 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 Sustainable Procurement Guidelines

Compliance with laws/social norms
Human rights and work environments
Safety and health
Consideration for the environment
Information security
Appropriate quality and safety and technological improvements
Stable supplies and flexible responses to change
Promotion of sustainability and sustainable procurement initiatives

Ascertaining and Improving Suppliers’ Sustainability

The DIC Group uses EcoVadis and the DIC Group Sustainable Procurement Guidebook, capitalizing on the distinctive features of each, to assess the sustainability of its suppliers and encourage related efforts.

EcoVadis

EcoVadis is a third-party web-based sustainability rating platform that assesses the performance of companies, providing sustainability scorecards and benchmarks, among others, and has been used to evaluate more than 100,000 companies worldwide. EcoVadis experts conduct evidence-based analysis of supplier information collected, facilitating the provision of objective and highly reliable assessments of suppliers’ sustainability. Sun Chemical, based in the United States, began using EcoVadis in 2020. In fiscal year 2023, the transition was made to an integrated subscription for use of this platform and deployment across the global DIC Group commenced.

DIC Group Sustainable Procurement Guidebook

Inaugurated in 2010, the DIC Group Sustainable Procurement Guidebook was developed with the aim of assessing suppliers’ sustainability and promoting improvements. Version 3 of this guidebook, published in fiscal year 2020, is currently in use.

Document Download

DIC Group Sustainable Procurement Guidebook (Version 3, published in February 2020)[516KB]

In addition to using the DIC Group Sustainable Procurement Guidebook to encourage awareness of the Group’s expectations of suppliers, outlined in the DIC Group Sustainable Procurement Guidelines, the Group conducts surveys using the guidebook’s self-evaluation sheet to ascertain the status of suppliers’ sustainability programs. The self-evaluation sheet consists of 45 questions segmented into the same eight categories as the DIC Group Sustainable Procurement Guidelines. In addition to analyzing and assessing responses to self-evaluation sheet questions and providing feedback to each supplier, the Group follows up with on-site inquiries or written comments when required.

The DIC Group Green Procurement Guidelines, included in the guidebook, oblige suppliers to ensure the stringent management of chemical substances and compliance with pertinent laws and regulations, as well as to promote the reduction of environmental impact. Using the appropriate survey form, the Group also confirms suppliers’ own green procurement efforts, ascertains the status of manufacturers’ responses to requests for improvements, and follows up as necessary.

Global Sustainable Procurement Efforts

・Japan

The DIC Group Sustainable Procurement Guidebook has been used in Japan since 2010 to assess Group suppliers’ sustainability. In fiscal year 2023, the Group collected evaluations from suppliers accounting for more than 85% of its domestic procurement spending using version 3 of the DIC Group Sustainable Procurement Guidebook. In instances where the supplier surveyed is a trading company, an additional survey was conducted for the actual producer, with responses received from 691 companies. Feedback was provided to all responding suppliers and producers. To date, the Group has followed up with on-site inquiries to a total of 102 companies.

In fiscal year 2023, the DIC Group also began conducting assessments in Japan using EcoVadis. Plans are to gradually expand the scope of assessments with the goal of strengthening its assessment of and encouraging improvements in the sustainability of suppliers.

・PRC and the Asia–Pacific Region

The DIC Group plans to commence full-scale surveys of suppliers in the PRC and the Asia–Pacific region using EcoVadis and the DIC Group Sustainable Procurement Guidebook in fiscal year 2024.

・The Americas and Europe

In the Americas and Europe, EcoVadis has been used by Sun Chemical to assess the sustainability of and encourage initiatives by its suppliers since fiscal year 2020. The company has completed assessments of suppliers accounting for approximately 80% of its procurement spending and will continue working to expand implementation.

Human Rights Due Diligence in Supply Chains

Recognizing the importance of respect for human rights in supply chains, the DIC Group works with its suppliers to promote initiatives across its own supply chains.

Initiatives Targeting Suppliers

In accordance with the DIC Group Sustainable Procurement Guidebook, the Group compels its suppliers to respect the human rights of their employees by, among others, providing equal opportunities, prohibiting forced labor, preventing harassment, paying appropriate wages, appropriately managing working hours, ensuring freedom of association and guaranteeing the right to engage in collective bargaining. In addition, the Group uses EcoVadis and the aforementioned guidebook to assess the status of suppliers’ efforts and encourages awareness of the need for improvements by providing feedback and conducting on-site inquiries.

Responsible Procurement of Minerals

The DIC Group has formulated the Basic Approach to the Responsible Procurement of Minerals and conducts surveys to ensure its ability to procure these critical resources in a responsible manner.

Advance Assessments of New Raw Materials

The DIC Group conducts advance assessments of new raw materials to confirm that there are no issues regarding legal or regulatory compliance, safety or other issues related to the sustainable procurement of raw materials. In Japan, for example, the Group mandates the submission of a DIC Raw Materials Survey,^*1 a safety data sheet (SDS), chemSHERPA^*2 and the CMRT.

A DIC Raw Materials Survey is a questionnaire the aim of which is to confirm basic information on the constituents of raw materials and their compliance with pertinent laws and regulations.
An acronym for “chemical information sharing and exchange under reporting partnership in supply chain,” chemSHERPA is a scheme developed in Japan for the transfer of information on raw materials across supply chains.

Ensuring the Sustainable Procurement and Use of Raw Materials

The DIC Group promotes the sustainable procurement and use of raw materials from a medium- to long-term perspective.

Surveying CO₂ Emissions Associated with Raw Materials

In response to social imperatives and the expectations of its customers, the DIC Group surveys CO₂ emissions associated with raw materials to calculate the carbon footprint of its products, that is, total CO₂ emitted over its products’ life cycles. So far, the Group has surveyed suppliers and collected relevant data, and has identified a need to broaden the range of items for which it gathers data. The Group will continue to keep abreast of industry trends, as well as to conduct surveys with the objective of accurately calculating and helping reduce its products’ carbon footprint.

Engaging with Suppliers to Reduce CO₂ Emissions Associated with Raw Materials

The DIC Group seeks to work with its suppliers to encourage the reduction of CO₂ emissions associated with purchased raw materials with the goal of lowering climate change risk and achieving Science Based Targets initiative (SBTi)^* certification of its target for reducing Scope 3 emissions. As a first step, in fiscal year 2023 the Group confirmed the status of efforts to set medium- to long-term CO₂ emissions reduction targets by suppliers accounting for approximately 90% of its procurement spending, as well as to publicize and raise awareness of these efforts.

For more information on the SBTi.

Promoting the Use of Bioderived and Recycled Raw Materials

The DIC Group actively promotes the use of bioderived and recycled raw materials. This includes using the Group’s global supply chain to conduct raw material surveys and sharing the results with technical groups, prompting product design reviews.

Internal Configuration and Employee Training

Internal Configuration

A dedicated team has been established within DIC’s Purchasing Department that is responsible for sustainability in the DIC Group’s supply chains. This team promotes a variety of efforts with the goal of achieving sustainable procurement for the entire Group, establishing KPIs for these initiatives to track progress. Global meetings and other initiatives are used to promote the sharing of information among different regions regarding region-specific initiatives, underscoring the Group’s robust commitment to advancing sustainable procurement. Thanks to these efforts, in 2023 the DIC Group scored an outstanding 70 points in the “Sustainable Procurement” category of the EcoVadis assessment.

Employee Training

To promote understanding across the DIC Group, training on sustainable procurement is provided to individuals involved in purchasing at point of hire, when joining a Group company and otherwise as appropriate.