Ensuring Social Responsibility within Our Supply Chain

The GS Yuasa Group, together with the supply chain, will contribute to creating a sustainable society.

Collaboration with Suppliers

Building Better Partnerships

The GS Yuasa Group believes that all suppliers are important business partners. For this reason, we work with our suppliers on matters of quality control, health and safety, as well as education and guidance on compliance and overall CSR with the aim of strengthening our business foundation together with those suppliers.

We also hold annual procurement policy briefings to raise understanding of our management policies, annual business policies, and basic procurement policy and to deepen mutual understanding and trust. We also award suppliers that have achieved excellent results in initiatives (CSR, safety, quality, delivery date, price, etc.) that we expect from our suppliers.

In fiscal 2023, we will actively promote procurement activities that focus on the three challenges of: achieving stable procurement throughout the supply chain; strengthening the business infrastructure (QCDS) for mutual development; and engaging in SDGs initiatives to cater to the needs of society and stakeholders.

Procurement policy briefing for suppliers

Supplier award winning companies

Basic Procurement Policy

We will work to create better partnerships with our suppliers, and contribute to people, society, and the global environment through sustainable procurement.

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).

In addition, we educate procurement personnel to enable them to appropriately implement responsible procurement. Also, while nurturing a greater understanding of Responsible Procurement Guidelines, we also foster greater awareness of the importance of preventing CSR risks that may affect the business continuity throughout the supply chain.

Overview of requirements for suppliers

Classification	Summary of requirements
Labor	Prohibition of forced labor and child labor, and of long working hours Payment of appropriate wages Elimination of discrimination and inhumane treatment Freedom of association Avoid complicity in human rights violations
Health and Safety	Appropriate safety management, management of industrial health, and response to occupational accidents and diseases Reduction of physically heavy work, safety measures for appropriate machinery, and provision of hygienic equipment, meals, and housing Mitigate impact in an emergency situation Promoting health and safety communication
Environment	Appropriate response to environmental laws and regulations concerning permits, approvals, and notifications Appropriate management of hazardous substances, waste, atmospheric emissions, and water Efficient use of natural resources and energy Reduction of greenhouse gas emissions Restrictions on use of substances
Corporate Ethics	Elimination of inappropriate profits Fair Business Transactions Respect for intellectual property Appropriate management of confidential information Appropriate export controls Promoting responsible mineral procurement Establishment of whistleblower system Transparent information disclosure
Product Safety	Ensuring product safety Providing safety information concerning products and services

Education on responsible procurement for procurement personnel

Responsible Procurement Guidelines

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 of 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.

Overview of supplier CSR survey items (fiscal 2022)

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Classification	Number of questions	Example question items
Labor	12	Forced labor, child labor, working hours, wages, inhumane behavior, discrimination, etc.
Health and Safety	10	Occupational safety management, preparedness for emergency situations, industrial health, physically heavy work, machinery and equipment, etc.
Environment	6	Environmental permits, pollution control, hazardous substances、waste, atmospheric emissions, wastewater, etc.
Corporate Ethics	7	Legal compliance, bribery, intellectual property, unfair trade, internal whistleblower systems, information security, etc.
Product Safety	1	Ensuring product safety
Total	36

Results of the supplier CSR survey (fiscal 2022)

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Items	Suppliers of domestic business sites	Suppliers of overseas business sites	Total
Number of companies surveyed	220	162	382
Number of companies targeted for improvement	20	14	34

Specific Initiatives to Promote Responsible Procurement

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

Examples of specific initiatives to promote responsible procurement

Ensuring Quality and Health/Safety
Green Procurement
Responsible Mineral Procurement
Initiatives for Carbon Neutrality and Reduction in Water Consumption
Encouraging the Use of Recycled Resources

1. Ensuring Quality and Safety

To promote activities that raise quality and enhance health and safety, including for suppliers who supply parts and raw materials, the GS Yuasa Group provides guidance on quality reflecting the needs of our suppliers as well as health and safety patrols, if required. In programs that raise quality, we share with suppliers the target values and the results of quality defect analysis of products supplied to the Group and work to improve the quality of these items along with them. In addition, we support quality improvement activities of suppliers by holding seminars on quality and conducting plant tours for suppliers.

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. 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.

Experience-based training

2. Green Procurement

The GS Yuasa Group companies in Japan makes the following requests of suppliers based on our Green Procurement Criteria.

Requirements for Suppliers

Operation of an environmental management system
Examination of chemical substances contained in items being supplied
Checking the legality of cutting down certain trees (logging)
Programs to identify and reduce CO₂ emissions

For 2. above, we ask our suppliers to examine substances using Chemical Substance Management Guidelines, which comply with international laws and regulations including EU directives (REACH, RoHS, etc.), and to test individual chemical substances as specified by customer needs.

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 2021, 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.

Suppliers selection criteria relating to environmental management

Acquired third-party certification of environmental management systems
Has not acquired third-party certification of environmental management systems but has submitted a plan for acquisition

3. Responsible Mineral Procurement

The GS Yuasa Group believes that addressing social issues (armed conflict, human rights violations, etc.) that may arise during the extraction, transport, and trading of minerals used in our products is crucial in the global mineral supply chain. In our promotion of responsible mineral procurement, we have established a policy that sets out our basic approach to responsible mineral procurement based on the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, an international framework for ensuring the responsible procurement of minerals throughout the supply chain. We also further efforts to ensure transparency in the mineral procurement process making active use of the practical guidance developed by the RMI,^*1 an international initiative to promote responsible mineral procurement, and use RMI survey form templates (CMRT^*2 and EMRT^*3) in gaining an understanding of procurement risks in the minerals supply chain. The GS Yuasa Group are engaging with risk management in mineral procurement based on our Responsible Mineral Procurement Policy to ensure that we can collaborate with suppliers and various other stakeholders to undertake activities without being complicit in armed conflict or human rights abuses.

1RMI：Responsible Minerals Initiative

2CMRT：Conflict Minerals Reporting Template

3EMRT：Extended Minerals Reporting Template

GS YUASA Responsible Mineral Procurement Policy

GS YUASA shall, recognizing the risks of significant adverse impacts which may arise in the supply chain of the minerals used in the products, parts, and materials handled by our company, promote responsible mineral procurement while respecting the internationally recognized framework through the following initiatives, to fulfill the responsibilities to respect human rights and avoid contributing to conflicts.

GS YUASA will investigate whether its group companies or their suppliers procure or use the minerals that may contribute to human rights violations or armed conflicts.
GS YUASA will, if it was revealed that anyone of its group companies or their suppliers has procured or used minerals that have a high risk of contributing to human rights violations or armed conflicts, work on activities to avoid the procurement or use of such minerals, in collaboration with related companies.

Refer here for the full text of the policy on responsible mineral procurement.

4. Initiatives for Carbon Neutrality and Reduction in Water Consumption

The GS Yuasa Group is working to reduce environmental impact not just from its own business activities, but throughout the entire supply chain to address environmental issues including climate change and resource depletion.

To address carbon neutral and water resource issues in particular, we request that suppliers cooperate with our measures for achieving CO₂ emissions and water consumption reduction targets (down by 1% or more compared with the previous fiscal year) in conjunction with production of products supplied to our Group.

The Group is working to conserve natural environments in all its business activities by efficiently using resources including energy and water throughout the entire supply chain.

5. Encouraging the Use of Recycled Resources

The GS Yuasa Group procures recycled resources using a system that recycles our own used products. To encourage the use of recycled resources, we participate in the Lead Acid Storage Battery Recycle Association, an industry group that promotes the cyclic use of automotive lead-acid batteries, and appropriately conduct stable recycling of used products throughout the supply chain in collaboration with other companies in the industry.

By encouraging recycling of our used products, the Group is contributing to the development of a recycling-oriented society and ensuring stable procurement of key materials.

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