Based on our Policies for Procurement, we establish the ESG Promotion Activities with suppliers and are committed to securing the traceability of the entire supply chain while working together with our suppliers. We will work to source our raw materials in ways that protect natural resources, the environment, safety and human rights.
We are conducting the following initiatives.
We define suppliers involved in the procurement of natural resources (palm oil, paper and pulp, etc.) and those that conduct inadequate due diligence in terms of human rights and the environment as “high-risk suppliers”. We identify “high-risk suppliers” and periodically review them with the approval of the Executive Officer in charge of purchasing.
We prioritize conducting third-party audits of “high-risk suppliers”, and conduct initiatives to identify risks and make improvements.
We identify “high-risk supply chains” in our raw materials procurement from comprehensive consideration of the following three perspectives.
At present, we identify supply chains related to palm oil and paper and pulp as “high-risk supply chains”, have established our “High-Risk” Supply Chain Management and Sourcing, and are conducting initiatives to resolve the fundamental issues.
Going forward, we will expand this scope as necessary in consideration of the above three perspectives.
We identify “high-risk supply chains” and periodically review them with the approval of the Executive Officer in charge of purchasing.
We identify risks through on-site dialogue with “high-risk supply chains”, conduct activities (training programs) with suppliers, NGOs, NPOs and others to resolve the fundamental issues, and track and report on the progress.
We are strengthening cooperation with suppliers through the following initiatives.
We evaluate supplier activities and provide feedback to suppliers from the perspectives of ESG, stable supply and strategic partnerships, and give recognition to suppliers who receive high evaluations.
Through supplier satisfaction surveys, suppliers evaluate the fairness of our procurement activities.
Over 30 items are surveyed, including vendor selection, quality, ordering, customer service and communication. We accept the survey results in good faith, and use them to make improvements to daily procurement activities.
Each year, we hold vendor summits to provide a place to share information and exchange opinions with suppliers, and communicate our business performance and procurement policy as well as information on selected themes for the year.
We conduct routine visits to supplier sites, and strive to deepen our understanding of issues in the supply chain and at production sites through direct dialogue at production sites.
June 29, 2022
Masakazu Negoro
Managing Executive Officer
Kao Corporation