Toray Group’s CSR Procurement, Purchasing and Distribution

Materiality Focus

As a manufacturer of advanced materials that supplies a wide range of materials and products, the Toray Group must engage in upstream management that reflects the needs of end users, including production facilities and the procurement of raw materials and products. Accordingly, the Group has established its Basic Purchasing Policies to emphasize this approach and ensure fair purchasing practices.

In its Basic Distribution Policies, the Toray Group pledges fair and equitable transactions as well as environmental preservation. The Group also emphasizes continuous initiatives to improve quality and reduce environmental impact related to distribution.

CSR Procurement Guidelines Adopted December 2004

  1. Establish an internal CSR organization and be committed to CSR
  2. Work to enhance corporate ethics and comply fully with all laws and regulations
  3. Position safety, accident prevention, and environmental preservation as a management priority and practice green procurement and purchasing whenever and wherever possible
  4. Put crisis management systems into place, including capabilities for responding swiftly in unexpected situations, and disclose accurate information
  5. Encourage dialogue and cooperation among all stakeholders
  6. Ensure product safety as a precondition for supplying products
  7. Respect human rights, eliminate discrimination, and improve workplace environments; prohibit forced labor, slave labor, child labor, and unfair low-wage labor
  8. Maintain the confidentiality of information and respect others’ intellectual property rights

Basic Purchasing PoliciesRevised December 2004

  1. Toray does its utmost to select suppliers and determine actual purchases fairly and on the basis of economic rationality, with consideration for price, quality, capability to provide stable supplies, technological capabilities, reliability, and other factors.
  2. In selecting suppliers, Toray opens its doors to a wide range of companies inside and outside Japan. Toray does not rely solely on vendors it has existing or past relationships with, or on members of its corporate group.
  3. In making purchases, Toray complies with relevant laws and regulations while taking environmental preservation and fulfilling corporate social responsibility (CSR) issues into account. Toray actively pursues green procurement and purchasing as part of its environmental efforts.
  4. Toray works to maintain and improve the quality of purchased products through cooperation with its suppliers.
  5. Toray works to uphold its corporate social responsibilities on a company-wide basis.

Basic Distribution PoliciesAdopted December 2004

  1. We shall select our transport and warehousing providers and determine individual agreements impartially and based on factors such as economic rationality with consideration given to price, quality, supply stability, technological capabilities, reliability, and efforts to reduce environmental impact.
  2. We shall be open in selecting our transport and warehousing providers, rather than relying exclusively on companies with which we have done business in the past or companies affiliated with Toray Group.
  3. We shall comply with relevant laws and regulations, consider environmental preservation, and fulfil our corporate social responsibilities in outsourcing our transport and warehousing operations.
  4. We shall cooperate with our transport and warehousing providers in gauging and reducing the environmental impact of our transport and warehousing operations.

Implementing CSR Procurement

Ratio of responses to CSR procurement survey requests from corporate customers

Toray operates corporate rules for socially responsible procurement and has a framework in place to rapidly and precisely respond to customer inquiries on Toray’s materials and CSR practices. Information on customers and suppliers is centrally managed in a shared database.
Toray conducts regular questionnaire surveys to monitor socially responsible practices at suppliers, as part of a plan-do-check-action (PDCA) cycle to encourage socially responsible practices in supply chains.

PDCA Cycle for Supply Chain Management

PDCA Cycle for Supply Chain Management

Surveying Suppliers about CSR

Toray asks its main suppliers and subcontractors to practice CSR procurement, targeting 90% compliance among business partners. Toray conducts a biannual survey on socially responsible practices, targeting major suppliers, manufacturing subcontractors, and sales agents who represent 90% of Toray’s procurement by value. In fiscal 2016, Toray asked to survey 526 companies. The survey provides a comprehensive picture of socially responsible practices and includes questions specifically related to Toray Group’s CSR Procurement Guidelines. The survey also gauges attitudes on areas of increased concern, such as biodiversity conservation and conflict minerals.

CSR Survey Results Analysis, Written Follow-Up and On-Site Visits

An analysis of the results of the survey conducted in fiscal 2013 showed that 88% (total of “excellent,” “very good,” and “good”) of respondents had made progress in CSR enough to build a sound partnership with Toray. Only 12% (total of “fair” and “needs improvement”) of companies were considered to require a follow-up audit.
In fiscal 2015, written follow-up and on-site visits were conducted for a number of companies for which follow-up audits were deemed necessary. On-site visits included discussions of specific measures for improvement. Taking the on-site visit as an opportunity, some companies, realizing the importance of CSR, built a system to drive their CSR activities.

CSR Procurement Initiatives throughout the Supply Chain

Toray has added conditions to its basic supplier agreement, regarding social responsibility in the areas of legal compliance, respect for human rights, environment, and safety. Both new suppliers and existing suppliers are asked to meet these conditions including upon contract renewal. Existing suppliers are also asked to sign written pledges.

Human Rights and Supply Chains

Toray Group’s CSR Procurement Guidelines mandate a commitment to respect human rights in procurement. Toray also works with suppliers to promote human rights in supply chains.

Addressing Conflict Minerals

The U.S. Securities and Exchange Commission (SEC) has issued rules requiring companies to disclose their use of conflict minerals. To comply with the rules, Toray investigates the use of conflict minerals in all products offered by the Toray Group, as part of its supply chain management. If conflict minerals are used, Toray investigates the suppliers to determine the mining operations and geographic source of the minerals.

International Cooperation in the Textiles and Apparel Industry

The Toray Group is a member of the Sustainable Apparel Coalition, together with other apparel manufacturers and retailers from around the globe. The coalition is dedicated to reducing the environmental impact of apparel and footwear products, and improving human rights for workers.

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Participants listen to talk at policy briefing.

Participants listen to talk at policy briefing.

CSR Lecture for Distribution Partners

In fiscal 2015, Toray invited an outside lecturer to give a talk on the topic of corporate governance and risk management at Basic Distribution Policy Briefings. These briefings were held at 73 of the Group’s distribution partners, and the information provided is expected to be utilized in their CSR activities.

CSR Procurement at Group Companies in Japan

Ratio of group companies that have implemented the CSR procurement framework

In fiscal 2014, the Toray Group achieved its target of ensuring that all group companies in Japan have a CSR procurement framework in place. A full 100% of group companies in Japan conducted CSR surveys of suppliers in fiscal 2015. The Group will continue to work to raise awareness of social responsible procurement and enhance these initiatives.

CSR Procurement at Group Companies Outside Japan

In fiscal 2014, the Toray Group conducted a survey on CSR procurement at 52 group companies outside of Japan. In fiscal 2015, Toray focused on those group companies for which promoting CSR procurement activities was deemed a high priority in the previous year’s survey and collected information on the current initiatives and identified the issues. Moving forward, Group companies will promote CSR procurement surveys and other activities that are tailored to the circumstances of the country or region in which they operate.