Ensuring Social Responsibility within Our Supply Chain

Promotion of Responsible Procurement

The GS Yuasa Group advances materials procurement based on awareness of such international social issues as forced labor, child labor and environmental destruction. Along with quality, performance, pricing, delivery deadlines and other conventional supply demands, it is also vital to base procurement in CSR championing human rights, working conditions and the global environment. Toward that end, the Group does not simply tackle CSR on its own, but also, in cooperation with suppliers, promotes responsible procurement in response to social issues.

By tackling CSR, we believe we can raise the mutual corporate value of our Group and suppliers and realize a mutually prosperous supply chain overall.

In fiscal 2018, the GS Yuasa Group published Responsible Procurement Guidelines and issued it to suppliers to better clarify the practices of responsible procurement. The Guidelines seek to support a sustainable society through the partnership linking the Group to all suppliers. We distribute the Guidelines in seven different languages so that overseas suppliers can also understand them. By ensuring that all parties in global supply chains are fully aware of the Guidelines, we work to raise suppliers’ awareness regarding the importance of responses to CSR issues in supply chains (such as human rights issues of workers). The key goal is to reduce business risks capable of negatively impacting improvements in mutual performance and sustainability, with supplier briefings held to raise awareness of the spirit and key points of these new parameters throughout the supply chain. In addition, we are working to further deepen our awareness of the results of Responsible procurement by obtaining the consent of suppliers to cooperate with the content of these guidelines. When commencing transactions with new suppliers, we select suppliers that consent to the Guidelines and conclude contracts that include provisions on compliance with social standards (environmental preservation, compliance, respect for human rights, fair trade, exclusion of antisocial forces, and so on).

Training on Responsible Procurement

The GS Yuasa Group holds seminars on its Responsible Procurement Guidelines for suppliers toward the fulfillment of its social responsibilities throughout the supply chain. These seminars are designed to promote understanding of the Group’s initiatives policies on respect for human rights, health and safety, environmental protection, corporate ethics, and product safety, as well as to share key CSR issues throughout the supply chain while requesting appropriate responses from suppliers.

We additionally educate the GS Yuasa Group’s procurement personnel to enable them to appropriately implement responsible procurement, while nurturing a greater understanding of the Responsible Procurement Guidelines and inform them of the importance of preventing CSR risks throughout the supply chain with the potential to affect business continuity.

The Group will continue to actively promote training on responsible procurement both for the Group and its suppliers toward the achievement of sustainable society in the supply chain.

Education on responsible procurement for procurement personnel

Responsible Procurement Survey of Suppliers

In order to realize a sustainable supply chain, the Group periodically surveys its major suppliers concerning their compliance with the requirements in the Responsible Procurement Guidelines. In this survey, suppliers evaluate their own CSR response status using questionnaire-type surveys, and the Group identifies CSR issues in the supply chain based on the results of the self-evaluations and implements a process to resolve these issues. We are working in collaboration with our suppliers to resolve the CSR issues in the supply chain in order to strengthen our business foundation.

Specific Initiatives to Promote Responsible Procurement

The Group is promoting diverse initiatives in collaboration with suppliers for the realization of a sustainable supply chain.

1. Ensuring Quality and Safety

The GS Yuasa Group collaborates with suppliers who provide parts and raw materials to promote activities that raise quality and enhance health and safety throughout the entire supply chain.

As part of our activities to raise quality, we share reduction targets and progress statuses on quality defects in products supplied with our suppliers, thereby aiming for continuous improvements in quality through mutual collaboration. Additionally, we hold seminars on quality with major suppliers at least once a year to share the GS Yuasa Group’s quality policies and statuses. This includes sharing information on trends in the quality loss index and the occurrence of defective products and critical quality-related claims. Meanwhile, we also focus efforts on developing human resources to support the raising of quality through undertakings such as kaizen team activities; learning on QC problem-solving methods; and group-format discussions conducted via online seminars. Our Group furthermore positions among its key requirements the acquisition of third-party quality certification programs, including ISO 9001 and IATF 16949,^* by our major primary suppliers. We request third-party certification during ongoing annual briefing and information sharing sessions with our suppliers for these requirements, while striving to increase the levels of quality management throughout the entire supply chain.

Further, we consider occurrence of occupational accidents on the part of suppliers as occupational accidents of the Group, and are committed to working with our suppliers to adopt measures based on safety-first, to promote occupational safety and health activities. Health and safety patrols that perform safety inspections at suppliers plants point out potential hazards and propose measures to mitigate those hazards depending on the scale of the risks. We provide support for suppliers to identify workplace risks that pose hazards to workers and take appropriate action including monitoring of hazards and formulation of safe working procedures. Since fiscal 2019, we have been holding experience-based training, so suppliers personnel can experience first-hand and gain an understanding of the hazards in their workplaces.

Through these activities, we are supporting the creation of strong partnerships in the supply chain and measures to ensure the quality of products used by customers as well as the health and safety of our suppliers.

IATF16949: International standard for quality management systems in the automotive industry

2. Green Procurement

The GS Yuasa Group requires its suppliers to establish and operate environmental management systems as one of the measures to reduce environmental burden. Our domestic Group companies additionally present suppliers with supplementary requirements specifically dealing with environmental management, based on our Green Procurement Criteria.

We furthermore hold environmental training sessions for major suppliers of our domestic Group companies, aimed at facilitating the understanding and thorough permeation of requirements associated with the environment. These training sessions address environmental themes which are of particular importance within the supply chain, under the GS Yuasa Group’s Fundamental Environmental Policy. Alongside this, we share our Group’s environmental targets and case studies of initiatives while requesting the provision of relevant information on environmental performance to establish the status of responses to our requirements.

The GS Yuasa Group is committed to promoting procurement from suppliers engaged in environmentally conscious business activities and will actively enhance responses to global environmental challenges, including the prevention of pollution within the supply chain, through collaborative efforts with our suppliers to improve environmental management.

GS Yuasa evaluates the appropriateness of stipulations to suppliers concerning green procurement by checking and auditing the status of their response. When selecting new suppliers, we apply supplier selection criteria relating to environmental management. In fiscal 2024, all suppliers that entered into new agreements satisfied those criteria. Further, for existing suppliers, we employ a supplier survey process related to responsible procurement to confirm the status of their response to environmental conservation.

By prioritizing trade with those suppliers that supply goods that conform to green procurement standards, we are reducing the environmental burden, including the burden within the supply chain.