Under the Furukawa Electric Group Procurement Policy, our Group will contribute to realize a sustainable society through co-creation with our partners*.

The Group promotes CSR procurement activities taking into account the environment and society, and published CSR Procurement Guidelines. In August 2024, we revised the Furukawa Electric Group CSR Procurement Guidelines to the 4th edition, with reference to the RBA Code of Conduct 8.0, etc. This was to promote CSR procurement activities in response to changes in social demands.
We ask new partners for agreement to comply with our CSR Procurement Guidelines as a prerequisite for starting business with us.
Based on our CSR Procurement Guidelines, we work together with existing partners to ensure strict compliance with laws and regulations and fair trade, consideration for human rights, safety, and the environment, reduction of environmental impact, and Responsible Mineral Procurement Efforts in our procurement activities. We also hold an annual Partners Meeting to directly explain our CSR Procurement Guidelines and our environmental and social policies, targets, and initiatives to our partners, and to provide ongoing encouragement to them.
As a risk survey for existing partners, in addition to the conventional questionnaire, we also issued a self-assessment questionnaire (SAQ) for major partners in accordance with the contents of the CSR Procurement Guidelines in FY2021. In FY2023, we expanded the scope of coverage to include partners of Group companies in Europe and the United States, in addition to Group companies in Japan and Asia. For partners falling under the categories of any of the survey items that we have identified as high-risk, we reconfirm the situation through interviews and other means, and encourage the partner(s) in question to correct the situation as necessary.

In addition, we have established contact points for inquiries about compliance and inquiries about human rights (JaCERʼs Grievance Form) on our website for the acceptance of reports on non-compliance and suspicious activities taking place within the context of our procurement activities. When a report has been received, we will check the described facts of that report, undertake a response such as an investigation, and provide feedback to whistleblower as deemed necessary.

<Partner Evaluation and Award System>

We conduct evaluations of partners when it comes to partners selected based on purchase amounts and importance (80% of the material and equipment purchase amount). We evaluate our partners on the basis of quality, technology, price, delivery system, social and environmental contribution, creditworthiness, etc., and provide feedback on the results of the evaluation in interviews, while also exchanging opinions on the evaluation results and aligning our mind on procurement activities. In 2023, we evaluated 230 partners and provided them with feedback on the results. Moreover, we are requesting continued cooperation in their efforts to ensure business continuity and a stable supply. In addition to the Outstanding Partner Award, Group Global Partner Award, Best Performance Award and Special Award, the Environmental Award is presented in recognition of achievements in the environment, and thus multifaceted efforts are evaluated.

<Holding Partners Meeting>

At the annual Partners Meeting, we explain our group procurement policy and our CSR Procurement Activities directly to our partners in order to deepen their understanding of our company. In FY2023, the event was held in June in a hybrid format combining online distribution and an in-person awards ceremony with 54 major partners attending at the event.

<Greenhouse Gas Emission Reduction Initiatives>

In order to work toward reducing greenhouse gas emissions throughout the value chain, we require our partners to strive to improve energy efficiency and continuously reduce energy consumption and greenhouse gas emissions based on our CSR Procurement Guidelines. At partner meetings, etc., we are encouraging the setting of targets for reducing greenhouse gas emissions. Furthermore, since FY2021, we have been conducting surveys on greenhouse gas emissions for some of our partners, and we have been working to understand the amount of greenhouse gas emissions in our value chain.

<Procurement Logistics Activities>

In order to reduce costs and CO₂ emissions during transportation, we are addressing the risks of soaring logistics costs and the inability to transport goods by selecting the most appropriate means of transportation within the value chain, such as making effective use of our return trip freights.

The Group has up to now clearly stated its approach to "responsible minerals sourcing" in the CSR Procurement Guidelines and has made it known to Group companies and business partners. In September 2022, we established the Furukawa Electric Group Responsible Minerals Sourcing Policy in response to recent changes in social trends and increasing social demands regarding minerals sourcing.

Based on the above policy, we promote compliance with the OECD Due Diligence Guidance, continue to investigate the use of target metals in major products of our company and group companies and actively promote procurement from smelters certified under the Conflict-Free Smelter Program of the Responsible Minerals Initiative (RMI).

In order to prevent or mitigate the adverse effects associated with mining of minerals in conflict- or high-risk areas, we have joined the Responsible Minerals TradeWorking Group of the Japan Electronics and Information Technology Industries Association (JEITA) in addition to making our own efforts. Thus, we are working to resolve issues related to conflict minerals in the world, and through intra-industry collaboration, to improve supply chain research activities.

Furukawa Electric conducts regular surveys on its main partners about their BCM measures. In FY2023, we held surveys for main partners and placed the results we received onto a database. In this way, we are building a system that enables us to quickly identify partners that are likely to be affected in the event of a disaster, and implementing measures such as establishing multiple procurement bases for important products.

In order to build sound relationships with our partners through fair transactions based on compliance with laws and regulations, our group reviews our internal systems for subcontracting and implements thorough employee training. In FY2023, we conducted employee training through e-learning to ensure everyone is informed.

We have set sustainability indicators and targets for “Building a governance system to strengthen risk management/Group Governance” in the Medium-Term Management Plan.