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 a sound relationship of cooperation with 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.

Implementation Structure

The Nippon Paint Group reorganized its sustainability structure in 2022 and established Global Teams based on Materiality to work directly under the Co-Presidents based on Asset Assembler model. We have an autonomous sustainability structure that is not controlled by the headquarters. With increasing concerns about human rights issues, ethical procurement has become an important element of our sustainability strategy. Therefore, we established a Global Team for Sustainable Procurement and have strengthened group-wide sustainable procurement measures.

── Activities of the Sustainable Procurement Team ──

Engagement with suppliers in order to ensure sustainable procurement of products and services through procurement processes that are environmentally, socially, and economically responsible