Basic Policy for Suppliers

Basic Policy for Suppliers

Building and maintaining a responsible supply chain is supported by business partners. The NAGASE Group aims to be a corporate group that can provide solutions to social issues that should be addressed throughout the value chain. Accordingly, we ask our suppliers to implement the following basic policies. Briefing sessions, document guidance, etc. In the event that any violating activities are found, we will request a response with a set deadline for improvement, and if no improvement is sought, we will respond by reviewing the transaction. Thank you for your understanding and cooperation.

1. Legal compliance and quality assurance

  • Comply with applicable laws and regulations in the countries and regions where business activities are conducted.
  • Provide safe, high-quality products and services.

2. Protection of human rights of employees

  • Prohibit all forms of discriminatory treatment and eliminate human-rights infringement such as forced labor and child labor.
  • Support freedom of association and the right to collective bargaining, and establish good labor-management relations.
  • Provide safe working conditions and ensure safety and health by eliminating excessive working hours.

3. Consideration to the global environment

  • Take measures against climate change by promoting GHG emissions control and lower energy consumption.
  • Conserve the global environment and prevent pollution by promoting waste reduction and recycling of resources.
  • Preserve water resources by promoting improved usage efficiency of water.
  • Recognize the importance of biodiversity, and maintain the natural ecosystem.

Review of Basic Procurement Policy

The NAGASE Group is currently reviewing its procurement policy. The responsible departments and the scope of application of the current Basic Procurement Policy are as follows.

Area Responsible section Abstract Scope
Legal Compliance and Quality Assurance Risk Management Div. Overall supply chain, including own and suppliers
Protection of Employees' Human Rights
Caring for the Global Environment Corporate Planning Dept

Using Ecovadis as a Supply Chain Key Metric

Public interest in corporate social responsibility in the supply chain is growing each year, with NAGASE Group companies receiving annual evaluations from Ecovadis in four areas: environment, labor and human rights, ethics, and sustainable material procurement.
In addition to our own company, we promote businesses that take social issues into consideration together with our suppliers, aiming to reduce business risks and realize sustainable procurement activities.

Quantitative Targets

Target Track record
Maintain and improve the EcoVadis rating obtained by each company Nagase (Group): Silver
Hayashibara Co., Ltd. (Current Nagase Viita Co., Ltd.): Platinum
NAGASE Specialty Materials NA LLC: Gold
Nagase(Europa) GmbH:Silver

Communicating basic policy for suppliers and strengthening partnerships

The basic policy for suppliers is communicated at the time of contracts and through briefing sessions in an effort to build good partnerships with business partners. In the event that any violating activities are found, we will request a response with a set deadline for improvement, and if no improvement is sought, we will respond by reviewing the transaction. Thank you for your understanding and cooperation.

Communication to global suppliers

To encourage suppliers to understand and cooperate with our basic policy for suppliers, we publish translations in English, Chinese, French, German, Spanish, and Portuguese as well as Japanese, on our sustainability website.

Supplier policy on minimum wage and living wage payment

We ask our business partners to strictly observe the minimum wage and total working hours, as well as to exceed the minimum wage and meet the living wage at their overseas bases, in accordance with the labor laws of each country.

Method for selecting new business partners

The NAGASE Group asks new business partners to confirm the NAGASE Group Procurement Policy at the time of new transactions and to implement the following basic policy.

Content stipulated in the NAGASE Group Procurement Policy
Legal compliance and quality assurance / human rights protection of employees / consideration for the global environment

Targets and progress

Disclosure item Target item Boundary Targets for FY2022 Results for FY2022
Supply Chain Value chain and environment Group Qualitative:
In line with the NAGASE Group Procurement Policy (3. Consideration for the Global Environment), we aim to build and maintain a responsible supply chain by having our business partners understand that environmental issues are social issues that should be addressed throughout the value chain.

Audits of business partners

For suppliers with ongoing business relationships, we check the management status of manufacturing sites as necessary, and request and support improvements if necessary. For new procurement transactions, we confirm whether the manufacturing site, management system, compliance with laws and regulations regarding the environment, human rights, labor, and safety, and management conditions are in accordance with the NAGASE Group basic policy for suppliers.
Group company Nagase Viita Co., Ltd. conducted an implementation audit (management system, transparency and business strategy, labor, health and safety, and environment) of a manufacturer of tapioca (base: Thailand), a raw material, in FY2023.

Security Trade Controls

Trade is the foundation of the NAGASE Group’s activities. To conduct appropriate trade in line with laws and regulations as a member of international society, the Security Trade Control Committee works to understand the export control situation, follow the latest revisions to the Foreign Exchange and Foreign Trade Control Law, and ascertain a detailed picture of export controls across the entire Group, while formulating related Group policies. The Item Compliance Management Council is in charge of directing and educating each business division and Group company in matters and statute updates determined by the Security Trade Control Committee. It is the responsibility of the Item Compliance Management Council to protect the Company and affiliates against the risk of illegal acts.

Specific Import-Export Management Framework

Information about our export products, technologies, and overseas customers is stored in and managed via our proprietary Product Management System. We confirm whether certain products or Technologies are subject to restriction under the rules of the Foreign Exchange and Foreign Trade Control Law and the U.S. Export Administration Regulations. Only those products approved by the Item Compliance Management Section are put into the system as products allowed for export. Going one step beyond mere adherence to the law, we define policies for the entire NAGASE Group associated with security trade controls that, as a rule, prohibit trade of products that are military-related items or that have military applications.

Efforts to Promote Personnel Development

The practical business of security trade controls changes every year. To keep pace with developments, the NAGASE Group encourages its employees—primarily those involved in export operations—to become Security Trade Control Associates by taking the exam offered by the Center for Information on Security Trade Controls (CISTEC).

Qualified Security Trade Associates (Cumulative)
Fiscal year ended March 31, 2018 890
Fiscal year ended March 31, 2019 947
Fiscal year ended March 31, 2020 982
Fiscal year ended March 31, 2021 1,033
Fiscal year ended March 31, 2022 1,089
Fiscal year ended March 31, 2023 1,125

Membership in the RSPO (full membership)

In August 2017, NAGASE & CO., LTD. joined Roundtable on Sustainable Palm Oil (RSPO), which aims to procure palm oil that is environmentally sustainable, and is promoting the spread of sustainability throughout the supply chain by participating in meetings and briefing sessions. We have set a target to procure 100% sustainable palm oil by the end of FY2025.

Joining Sedex

In 2019, NAGASE joined Sedex, which promotes the creation of ethical supply chains.

Reaching out to the supply chain

Calculation and visualization of CO2 emissions in the supply chain using "zeroboard“

Zeroboard is a SaaS-type cloud service developed not only for the purpose of improving the efficiency of the company's calculation of CO2 emissions, but also for the purpose of visualizing CO2 in the supply chain. NAGASE will contribute to the realization of a decarbonized society through the popularization of zeroboard mainly in the domestic and overseas chemical industries where NAGASE has a network.

For more information about zeroboard, please see the examples of initiatives below.

Participation in supply chain initiatives

Each company of the NAGASE Group participates in the following supply chain initiatives and supports the relevant codes and guidance provided by each organization.

Other participating supply chain initiatives

KINKA CHEMICAL SOCIETY / Japan Chemical Exporters and Importers Association / Japan Chemical Industry Association / Center for Information on Security Trade Control / THE JAPAN PLASTICS INDUSTRY FEDERATION / Semiconductor Equipment Association of Japan / Association of PET TRAY / Japan Fashion Color Association / Japan BioPlastics Association / Japan Auto Parts Industries Association etc.

Supplier Policy on Animal Welfare

We request our suppliers to take the following actions regarding animal welfare.

When animals are used for testing and research, for the manufacture of biological products, or for other scientific purposes, to the extent that the purpose of the scientific use can be achieved, we will use alternative methods of providing animals as much as possible, reduce the number of animals used for such purposes as much as possible, and take other appropriate measures to ensure that animals are used appropriately. We will give due consideration to the use of the In addition, when animals are used for scientific.

Measures Against Conflict Minerals

A portion of minerals supplied by regions in conflict are said to be resources providing funds for inhumane armed forces, potentially leading to infringement of human rights.
The NAGASE Group, as a party building and maintaining responsible supply chains, conducts investigations as appropriate in the event of dealing in conflict minerals.

Conflict Minerals

Of minerals mined in countries and regions in and around conflict zones, this term refers to resources providing funding for armed forces. As defined in Section 1502 of the Dodd Frank Act, these are minerals such as tungsten, tantalum, tin, and gold that are produced in the Democratic Republic of Congo and proximate nations.

Examples of initiatives

Commenced demonstration of chemical joint transportation matching service

The NAGASE Group considers the improvement of transportation efficiency, reduction of distribution costs, and measures for the natural environment as important issues in chemical distribution. In May 2022, Nagase & Co., Ltd. started the industry’s first demonstration test of a joint transportation matching service specializing in chemicals. A total of 11 companies, including chemical, paint, and ink suppliers and logistics company Senko Nagase Logistics Co., Ltd., participated in the demonstration, utilizing the AI joint transportation matching service TranOpt provided by Japan Palette Rental Corporation (JPR). Through these efforts, we aim to improve the actual vehicle and loading rates of truck transportation, reduce the labor of truck drivers, reduce transportation costs, reduce greenhouse gas emissions, and establish a common transportation infrastructure by the end of fiscal 2023(There is a case in which CO2 emissions were reduced by approximately 60% through the use of “TranOpt”.). We will continue to resolve supply chain issues and contribute to the realization of sustainable joint chemical transportation.

Commenced demonstration of chemical joint transportation matching service

Started joint development for commercialization of production processes for rare amino acids using smart cells

The NAGASE Group believes that high-efficiency production of useful substances with complex structures, which were previously difficult to mass-produce, is an environmentally friendly development method from the viewpoint of reducing raw material consumption, waste, and energy consumption. In April 2022, Nagase & Co., Ltd., together with Hitachi, Ltd. and Hitachi Plant Services Co., Ltd., began joint development aimed at establishing a precision fermentation process for useful substances, including the rare amino acid ergothioneine (EGT), using microorganisms (smart cells) that maximize the production capacity of substances by combining biotechnology and digital technology. Specifically, the three companies, Nagase & Co., Ltd., Hitachi, Ltd., and Hitachi Plant Services Co., Ltd., will begin the following joint development activities aimed at commercializing production processes for useful substances such as EGT using smart cells by utilizing and integrating the experience and know-how accumulated over many years. The details of the joint development are as follows:
(1) Use of culture simulation technology and other methods to predict scale-up conditions for the smart cell culture process
(2) Analyses of data from lab experiments and production process studies to find process and scale-up conditions that maximize productivity
(3) Establishment of methods for engineering and optimizing production processes
Through the results of this joint development, we will work to solve issues toward EGT mass production processes using smart cells, and by applying these processes to various useful materials, we aim to realize a sustainable, healthy, and convenient society by both reducing environmental impact and increasing production efficiency.

smart cells

Calculation and visualization of CO2 emissions in the supply chain using the Zeroboard

The NAGASE Group considers the calculation and visualization of CO2 emissions in the supply chain related to climate change issues as an important challenge. With the aim of supporting the decarbonization of corporate management, NAGASE & CO., LTD. has agreed to a business alliance for the sales and business development of Zeroboard, a cloud service for calculating and visualizing CO2 (carbon dioxide) emissions developed by Zeroboard Inc. and will market this service, ascertain customer needs, and develop and provide solutions for reducing CO2 emissions, mainly to the chemicals industry. As countries around the world strive to become carbon neutral by reducing CO2 emissions to zero as a whole, Zeroboard has been developed not only to improve the efficiency of calculating CO2 emissions for the company, but also to visualize CO2 emissions in the supply chain. From FY2022 onward, the two companies have been using the database to develop businesses such as a business-to-business matching platform to provide solutions for reducing CO2 emissions, and to propose efficient methods for calculating environmental data that capture changes in the external environment. Through this partnership, Zeroboard Inc. and NAGASE & CO., LTD. will contribute to the realization of a decarbonized society by supporting the decarbonization of corporate management.


TABRASA™, a new material search platform

The NAGASE Group considers the challenge of developing new materials in the supply chain as an important issue. NAGASE has provided a new material search platform, TABRASA™, developed jointly with IBM (hereinafter “IBM”) of USA. This platform is a commercialization of IBM's technology as a SaaS service (Software as a Service: software provided in the cloud) for materials informatics by NAGASE. It is deployed to a wide range of NAGASE Group customers and suppliers, including those in the high-performance materials and bio-chemicals industries, to help them solve problems and promote innovation through DX (digital transformation) of their R&D processes. TABRASA™ uses two different engines, the analytics approach and the cognitive approach, to search for materials, making it easy to use without the need for specialized personnel with advanced knowledge and skills. We will continue to promote TABRASA™ as a platform for solving issues related to the development of new materials in the supply chain, and aim to realize a "safe, secure and comfortable society in which people can live comfortably" through a new business model that identifies issues that business partners are not yet aware of and provides value that leads to solutions.


Initiatives related to the environmental impact of the supply chain
Management of recycling operations and development of recycling materials

The NAGASE Group considers the operation and management of recycling in the supply chain and the development of recycled materials as important issues. NAGASE & CO., LTD., which holds the NAGASE Application Workshop, contributes to reducing the environmental impact through the operation and management of recycling in the supply chain and the development of recycled materials. We support the recycling of Tritan wine glasses (manufactured by Ishikawa Jyushi), which are used in all stores of Saizeriya's Italian restaurant Saizeriya, by providing recycled materials and developing products for Ishikawa Jyushi.