Fair Operating Practices

Supplier Social Assessment

KPI

Move the screen to the left or right to see the table information

Item FY 2021 results FY 2022 results
Ratio of new suppliers that business was commenced with after conducting a social impact assessment (Consolidated) 100% (46 companies)
*Total Procurement Division
(Consolidated) 100% (58 companies)
*Total Procurement Division
Negative impacts on societies in the supply chain and actions taken Various surveys, studies and audits were performed on 46 companies that we did business with for the first time
No specific suppliers were identified to have negative impacts on societies.
Various surveys, studies and audits were performed on 58 companies that we did business with for the first time
No specific suppliers were identified to have negative impacts on societies.

Responsible Departments

Raw Materials Procurement Department, Indirect Materials Procurement Department, Procurement Division

Our position and Targets

Why is “Supplier Assessment for Impacts on Society” a critical issue to be addressed?
Explanation of the reason and background

The raw materials used in the major products of the Yokohama Rubber Group contain many petrochemical products (chemicals) including various types of synthetic rubber that can cause environmental pollution and the lack of communication with local residents that live near production plants could have a negative impact. In addition, if materials used at business locations are purchased from local suppliers, there could be cases of fair trade not being conducted or costs increasing resulting from delivery delays, defective parts, etc.
Materials used as natural capital include cobalt, glass (silica sand), graphite (natural), mica (isinglass), natural rubber, steel/iron, tin, and zinc.
In order to ensure stable and ethical procurement in the future, the development of a healthy and safe working environment for the people who work in the cultivation and collection of natural resources, and manufacturing of industrial products and processed goods that allows them to live safely together with their families is important. We cannot rule out the presence of risks related to human rights issues in certain regions of procurement. We recognize the importance of enforcing labor practices and evaluations of human rights.
In addition, in response to the possibility of profits from transactions involving minerals (tantalum, tin, tungsten, and gold) in conflict areas being used as funding for anti-social organizations, the Securities and Exchange Commission (USA) established the Dodd-Frank Act that calls for the identification of refiners. We have selected social impact assessments of suppliers as a critical issue to be addressed from both the perspective of the stable procurement of raw materials and the perspective of ethics.

Social impact assessment at the start of new business relationships

We conduct CSR questionnaires and request answers to questions concerning working conditions and human rights to confirm that there are no problems.
When newly adopting raw materials, we request suppliers to answer a questionnaire on (1) whether a framework for just and fair trade has been established, (2) external communication frameworks, and (3) what kind of activities they conduct. In addition, we also ask suppliers to participate in CSR Supplier Study Meetings and to cooperate with surveys on conflict mineral use.

Recognition of social impact in the supply chain

We recognize that depending on the country or region in which each of our offices is located, people may come to work from outside the country or region and may not be able to perform the same work under the same working conditions. In addition, there may be cases where employees come to work from outside the country or region, and we recognize the possibility that they may be treated or treated in a way that violates their human rights.
We recognize that in some countries and regions where our business locations are located there is the possibility of corruption related to commercial transactions, compliance, or anti-competitive behavior occurring due in part to the impact of culture or customs.

Countermeasures in response to suppliers found to have a significant impact on the environment

We request that corrective action is taken by suppliers that are found to have a significant impact, and promote improvements together. In malicious cases, we inform the suppliers that penalties such as suspension of transactions may be applied, and respond according to the situation.
For example, we deem the impact to be significant in cases such as child labor (that results in children not going to school, etc.) and forced labor (long working hours, lack of appropriate breaks, low wages, etc.).

Vision and targets

We aim for the creation of a framework that ensures assessments are conducted in every case of procurement of local raw materials at the time of industry reorganization or expansion into new countries and regions so that contracts are entered after confirming local conditions.
As production sites expand on a global level going forwards, we aim to conduct appropriate procurement in each country and region and increase the ratio of appropriate procurement. To that end, to confirm there are no issues in advance, we will begin checking the details of business partner surveys and self-check sheet responses by suppliers.

Measures to pursue our vision

We will check that our employees are reliably conducting assessments of new suppliers in accordance with the action guidelines and procurement code of conduct.
We hold CSR Supplier Study Meetings to share information on matters including trends in transaction rationalization and initiatives.
In addition, we ask suppliers that provide raw materials used in the Yokohama Group’s products to investigate and confirm their materials due not contain conflict minerals. Objectives related to sustainable procurement have been incorporated as performance evaluations with the Procurement Division.

Responding to conflict minerals

At the Yokohama Rubber Group, we endeavor to take into consideration human rights, society, and the environment in our global procurement activities.
To this end, we use the conflict minerals reporting template (CMRT) and the extended minerals reporting template (EMRT) to identify the presence of various minerals included in raw materials and collect information on refineries every year.
As a result, we do not intentionally use ores (conflict minerals: tantalum, tin, gold, and tungsten) from conflict areas in the Congo.
We do the same for cobalt and mica, and do not intentionally use minerals from conflict zones.

Review of FY 2022 Activities

We conducted various questionnaires, survey, and audits with 58 companies that we commenced businesses with during fiscal year 2022, and there were no items that required improvement.
For products delivered to customers that are listed on the stock market in the US, there were no raw materials that used minerals (tantalum, tin, tungsten, and gold) coming from conflict areas.
In preparation for the CSR Supplier Workshop to be held in an online (webinar) format in the future, we held numerous discussions on how to proceed and possible problems to anticipate (held on May 29 and June 2, 2023).
The Subcontractor Guideline Study Group is designed to help employees of the Yokohama Rubber Group understand the Act against Delay in Payment of Subcontractor Charges (Subcontractor Law) and prevent violations.
Following on from the previous year, the format continued to be an online briefing session. Including participants from our group companies, a total of 149 people participated in the basic and practical sessions.
We also conducted field surveys of 53 supplier companies in FY2022 (100% of initial plans).

Future challenges

We recognize the continual acquisition and management without exception of results of surveys and assessment on the social impact of suppliers of raw materials used in the products of the Yokohama Rubber Group as an important issue.
With regard to supplier labor practices, we will promote the operation of a management system in order to share information across the Group on conditions in countries and regions we expand our business into in the future.
We also analyze the aggregated results of questionnaires targeting overseas suppliers, and consider countermeasures.