Management System Supplier Evaluation and Guidance for Improvement Participating in Initiatives

Supplier Evaluation and Guidance for Improvement

Sustainable Procurement Survey

The Group has adopted the CSR/Sustainable Procurement Self-assessment Questionnaire (SAQ) * drafted by the UN Global Compact Network Japan supply chain subcommittee meeting as the Sustainable Procurement SAQ format used to request responses from suppliers. This SAQ was drafted to conform with the UN Global Compact’s 10 principles and international regulations such as ISO 26000 and GRI. Although the Group already requests that our suppliers meet the requirements of the Sustainable Procurement Guidelines , it is the SAQ that specifically defines the details of these requirements.
Mitsui Chemicals requires that suppliers complete the SAQ, and provides feedback and improvement assistance to suppliers based on the response results. In addition, the SAQ completion rate (Group-wide transaction value basis) has been included as one of the KPI within the 2025 Long-term Business Plan as the sustainable procurement ratio.

*Partial excerpt from the CSR/ Sustainable Procurement SAQ tool set of the helpful series aimed at realizing global sustainable development published by Global Compact Network Japan.

Mitsui Chemicals selected applicable suppliers that were requested to complete the SAQ based on the purchasing track record of the Purchasing Division over the three-year period starting in fiscal 2014. We conducted a survey on procurement in 2017 on our first-tier suppliers, which covers 90% of our purchase figures from the highest ranking figure. Approximately 90% of the companies (307 companies) responded to the survey by fiscal 2018.

In fiscal 2018, we created a guidebook for the sustainable procurement SAQ. This guidebook is submitted to suppliers whose SAQ score was less than 70% in order to help them deepen their understanding of the aims of the questionnaire. In our guidance visits to suppliers whose score was less than 40%, we used this guidebook to take account of the differing situations of each company in their SAQ responses. As a result, their understanding on reflecting the efforts made into the SAQ response and the scores of all the companies that received guidance visits have improved to 40% or more. We requested these suppliers to continue their efforts for further improvement.
The next questionnaire is scheduled to be distributed in 2021.

Sustainable procurement SAQ results (Fiscal 2017–18)

SAQ score levels No. of Companies Actions for improvement
Level 3
(Score 70% or higher)
223 Feed back comments along with information about average score of all companies, industry average, and chart of company scores.
Level 2
(Score 40% or higher to less than 70%)
70 Submit a guidebook for the SAQ and request corrections by the next survey (2021).
Level 1
(Less than 40%)
14 Visit company premises and exchange opinions towards improvement, as well as explain the intention of SAQ using a guidebook for the SAQ. Also, request resubmission of questionnaire answers.
Total no. of responses 307 (Response rate: 90%)

Sustainable procurement ratio

  Fiscal 2017 Fiscal 2018 Fiscal 2025(Goals)
Purchasing Division transaction value basis 73% 84%
Mitsui Chemicals, Inc. transaction value basis 39% 44%
Mitsui Chemicals Group transaction value basis 70%

Going forward, we will engage in sustainable procurement for purchases made by the business divisions and domestic and overseas affiliates. In fiscal 2017, we carried out the following.

  • Exchanged information between the Purchasing Division and 20 other divisions, including the business development divisions, and shared the status of sustainable procurement.
  • Had the Purchasing Division provide explanations of sustainable procurement at domestic affiliate liaison meetings. Exchanged information between five major domestic affiliates.

We plan to conduct risk assessments of suppliers jointly with business divisions and domestic and overseas affiliates to reinforce the sustainable procurement structure of the Mitsui Chemicals Group. We also plan to conduct a paper audit on suppliers used by the Purchasing Division and, as required, a field audit.

Sending Reminders to Our Suppliers

In fiscal 2016, Mitsui Chemicals sent reminder letters to around 2,600 Purchasing Division suppliers containing the following items. Then, in fiscal 2018, we held briefings in companies affiliated to our works on these items, as well as distributing reminder letters. We also submitted letters rejecting any gifts to all suppliers of the Purchasing Division.

  • Examples of previous discrepancies
  • Request items for each supplier
    Compliance with laws and social norms from a sustainable standpoint
    Avoid engaging in direct price negotiations with requesting divisions regarding transactions overseen by the Purchasing Division
    Formulate BCPs (business continuity plans)
  • The Mitsui Chemicals Group Purchasing Policy details and Risk Hotline reminder

Policy on Conflict Minerals

We are fully aware of the essential need to address so-called conflict minerals here at the Mitsui Chemicals Group. In fiscal 2015, the Purchasing Division conducted an investigation covering all raw materials except fuels and packaging materials transactions taken in fiscal 2014. As a result, we have confirmed that we do not purchase or use any conflict minerals associated with inhumane acts committed by armed groups on the ground in the Democratic Republic of Congo or any of its neighboring countries. That includes gold (Au), tantalum (Ta), tungsten (W) and tin (Sn). If it comes to light that we have used any conflict minerals in the future, we will immediately halt procurement of the relevant minerals.
In addition, the Purchasing Division and RC & Quality Assurance Division are working together every year to conduct conflict mineral surveys of our suppliers by identifying tin catalysts, etc., within those Group product compositions that are registered in the chemical product safety information system. The surveys confirmed that there are no issues with the minerals we use.
The sustainable procurement SAQ includes a category for confirming conflict mineral-related activities.

*In July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in the U.S. The act came about as a result of reports regarding serious human rights violations and damage to the environment, stemming from inhumane acts committed by armed groups on the ground in the Democratic Republic of Congo and its neighboring countries. As this has become a serious international issue, there are growing concerns that trade in conflict minerals could be used to fund armed groups in those countries, either directly or indirectly.

Internal Training

In fiscal 2016, Mitsui Chemicals conducted sustainable procurement training targeting all of its Purchasing Division employees. Since this time, this training has been included as one of the required elements of procurement training for all newly appointed members.
In fiscal 2018, we provided a training program on the items covered in the sustainable procurement SAQ to all Purchasing Division employees to ensure their understanding of the aims of the SAQ. In fiscal 2019, we plan to do the same for the purchasing officers in the business divisions and domestic and overseas affiliates.
We also make it mandatory for purchasing staff members working in the company other than in the Purchasing Division to take an e-learning course on procurement rules, and conduct regular group training every year.

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