Nippon Paint is firmly committed to doing business ethically and responsibly. Sustainable procurement is the integration of Nippon Paint’s ESG principles into our procurement processes and decisions while maximizing shareholder value.

Our approach to achieving MSV

We believe that our suppliers play an important role in ensuring the sustainable procurement of products and services through environmentally, socially and economically responsible processes. To strengthen our partnership, Nippon Paint Group has in place the Supplier Code of Conduct to align our global expectations, in the areas of compliance, environment, social and governance. We have engaged our suppliers through a survey to reinforce their commitment to the ESG principles set forth in our Supplier Code of Conduct. We will explore the supplier ESG audit program to identify areas for improvement in our supply chain. This is a part of our continuous efforts to work with our suppliers to align our approach to ESG.

Key items of the Supplier Code of Conduct

Our approach to raw material procurement

Our Group’s businesses depend on the supply of a broad range of products and services, such as raw materials, equipment, other materials, and information services. Maintaining and building strategic relationships with key suppliers is essential for the sustainable growth of our businesses. Our Group has a Procurement Policy that is aligned with our basic approach to business transactions. Our goal is to have all group employees and suppliers understand and comply with this policy.

In addition, the Japan Group has established Procurement Guidelines, which define the Procurement Policy in more detail and clearly set rules and procedures to be followed by our Group and suppliers for responsible procurement. The guidelines are consistent with major international frameworks and standards for social activities, including frameworks for the respect for human rights, such as the Universal Declaration of Human Rights, the Ten Principles of the UN Global Compact, the United Nations Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, the Modern Slavery Act of the United Kingdom, and the International Labour Organisation’s Core Labour Standards. We prohibit forced labor, discrimination, and subhuman treatment. Our goal is to eliminate child labor, protect young workers, provide fair wages, properly manage working hours, and support employees’ rights to organize through freedom of association and collective bargaining rights. The guidelines also define our environmental activities for the understanding and practice of environmental measures. This includes complying with all laws and regulations in every country and region and implementing measures to manage chemicals, minimize our environmental impact (prevent air, water and soil contamination), reduce greenhouse gas emissions, protect biodiversity, conserve and reuse water, use energy resources efficiently, and reduce waste materials. The procurement activities of the Nippon Paint Group also place top priority on the environment, society and governance (ESG).

NIPSEA Group is firmly committed to operating as a responsible business that is held to high standards and has a positive impact on sustainable development. NIPSEA Group Supplier Code of Conduct, which defines business conduct expectations for new and existing suppliers, ensures that its business partners uphold the same high standards that NIPSEA Group does. NIPSEA Group Supplier Code of Conduct covers three main area(Business Practices and Ethics, Labor Practices and Human Rights, Environmental Regulation and Protection).

ーGroup Procurement Policy－

In accordance with the management philosophy of the NipponPaint Holdings Group, Procurement Department complieswith and promotes the following policy in its procurementactivities with the suppliers, which are our precious partners:

1.  Legal compliance and respect for human rights:The Nippon Paint Holdings Group will conduct procurement incompliance with laws and international rules, with respect forhuman rights, and without any abuse of human rightsincluding discrimination or unfair labor practice.
2.  Fair transaction:The Nippon Paint Holdings Group will conduct fair and equitableprocurement based on free competition and make efforts toeliminate personal interests from the selection of suppliers.
3.  Selection of suppliers:The Nippon Paint Holdings Group will select suppliers in arational manner based on management policies, ESG activities,promotion of environmental conservation and resourceprotection, continuous commitment to the control of safety andhealth risks, etc., in addition to quality, price competitiveness,stable supply, technical capabilities.
4.  Establishment of a trust relationship with suppliers:The Nippon Paint Holdings Group will place emphasis ondialogues with suppliers, work to establish a trust relationship,and promote sustainable procurement together. We will alsopromote the reduction of risks in procurement activities incooperation with suppliers.

Our approach to greenhouse gas emissions in procurement

The significant contribution of raw materials to our greenhouse gas emissions (Scope 3) is an important issue that we believe needs to be addressed, not just by procurement, but in collaboration with our technical team. We have worked to diversify our transportation and distribution system to increase ship and rail usage for internal transfer which are not time critical.