Idemitsu aims for the sustainable development of society and the company by conducting fair and equitable procurement based on proper procurement ethics, contributing to the improvement of business competitiveness, and conducting honest management for all stakeholders. To this end, we established the Basic Procurement Policy and internal rules dubbed General Rules Concerning Procurement Activities. Through the policy and rules, we aim to contribute to the realization of a sustainable society throughout the supply chain.
In particular, we have established criteria for selecting suppliers when purchasing or borrowing the materials, construction work, and services necessary for our business operations, and we ensure that suppliers understand the policy.
The Group established its Basic Procurement Policy based on the Management Philosophy and Action Mindset. To co-create a sustainable society throughout the entire supply chain with our business partners through procurement activities based on strict ethics, the Procurement Department is leading efforts to move forward in close collaboration with our partners and based on the Sustainable Procurement Guidelines.
The business environment is diversifying, and in order to achieve sustainable development, it is expected that every company will actively strive to fulfill its social responsibilities not only for itself but for the entire supply chain. The Basic Procurement Policy is based on the Management Philosophy and Action Mindset and we will work with business partners to co-create a sustainable society throughout the entire supply chain through procurement activities grounded in unwavering ethics. In order to fulfill this responsibility, we formulated our own Sustainable Procurement Guidelines based on ISO 26000 (Guidance on Social Responsibility), ISO 20400 (Guide to Sustainable Procurement), the Sustainable Development Goals (SDGs), and the 10 principles of the United Nations Global Compact. Our guidelines cover seven fields: 1) organizational governance, 2) human rights, 3) labor practices, 4) environment, 5) fair business practices, 6) consumer issues, and 7) social contribution. We exchange information with business partners regarding the status of our sustainability-related efforts as we strive to mutually attain a higher level.
Working in collaboration with all our suppliers, we hold in-house workshops as part of our procurement activities to convey that we strive to fulfill our social responsibility through the entire supply chain. Furthermore, when selecting new suppliers, we adhere to our Sustainable Procurement Guidelines.
We think engaging in true dialog with suppliers based on a fundamental relationship of trust is extremely important in building a healthy supply chain through sustainable procurement activities.
We take steps such as those listed in the diagram below when engaging in a series of dialogs with suppliers.
Having each supplier conduct a self-evaluation based on the Sustainable Procurement Self-evaluation Sheet in the first half of the process leads to rapid detection of and response to risks that emerge. We then engage in direct dialog with suppliers when necessary, while also keeping the identification of potential risks in mind. During such dialogs, we ask where the root causes of the problems identified are from the perspective of sustainable procurement, and engage in mutual discussion that goes beyond the positions of the orderer and the recipient of an order, and confirm the actions for improvement that will be implemented by both sides.
The Procurement Department engaged in exchanges on self-evaluations with 153 companies last fiscal year and entered into dialog with 126 of those companies. This dialog cycle is repeated about once every three years. In FY2022, we engage in the second round of dialog with suppliers who we engaged in a first round of dialog with in FY2019.
We received the following feedback on Idemitsu Group initiatives from those in charge of procurement at suppliers.
We are working to deepen mutual understanding while communicating the Company’s stance on sustainable procurement and its Basic Human Rights Policy. Specifically, from the perspective of preemptively preventing threats to our computer network, we are making such improvements as sharing the Company’s cyber security letter to suppliers upon request and establishing reporting hotlines in the supply chain. On an as-necessary basis, we also provide suppliers with document drafts designed to help them formulate various rules while assisting them in the implementation of employee education on biodiversity. Through these and other support measures, we are striving to help suppliers resolve issues confronting them.