Sustainable Procurement Guidelines

The Tokuyama Group Sustainable Procurement Guidelines have been prepared based on the Tokuyama Group Basic Procurement Policy. Their purpose is to ensure that the Tokuyama Group fulfills its social responsibilities and practices sustainable procurement throughout the supply chain with the cooperation of all trading partners, including both suppliers and service providers.

We request your understanding and support for the purpose of the Guidelines and ask that you commit to this purpose.

1. Compliance with laws and regulations, social norms, and corporate ethics

• We comply with the relevant laws and regulations in commerce, the environment, safety, intellectual property, and other areas in each country and region where we conduct business activities.
• We ensure thorough compliance and respect the local social norms, ethics, culture, and customs.
• We establish internal and/or external systems that enable reporting and consultation on illegal, fraudulent, or other conduct that poses a significant risk. In such cases, we strictly maintain the confidentiality of whistleblowers and ensure they are not subjected to disadvantageous treatment.

2. Respecting human rights, including labor rights

• We respect internationally proclaimed basic human rights and do not tolerate any kind of inhumane treatment.
• We do not discriminate based on personal characteristics in recruiting and employment, and we strive to ensure fairness and provide equal treatment and opportunities for everyone.
• We prohibit all forms of forced or child labor. We also give due consideration to the work of young adult workers.
• We observe the minimum wages in each country and region where we conduct business activities. We also give due consideration to the payment of the living wage, a level of wage that allows people to afford the necessities of life.
• We pay wages appropriately, without making unfair deductions.
• We respect the basic rights of workers, including freedom of association and the right to collective bargaining, in accordance with the laws and regulations in each country and region where we conduct business activities.

3．Ensuring occupational health and safety

• We manage working hours and time off appropriately in accordance with the laws and regulations in each country and region where we conduct business activities, and prevent overwork.
• We assess and practice proper management of risks at workplaces, including accidents, hazardous chemical substances, noise, offensive odors, and vibrations and strive to maintain and improve workers’ health and safety.
• We give consideration to mental health and strive to promote workers’ health, both physically and mentally.
• We formulate measures to respond in an emergency, such as a natural disaster or accident, and work to ensure everyone is thoroughly aware of them through training and other means.

4. Environmental initiatives

• We establish and maintain environmental management systems and continuously strive to reduce our environmental impact.
• We practice appropriate management of hazardous substances and substances of concern designated by laws and regulations. We reduce usage and emissions of such substances as much as possible. When there are emissions, we carry out the appropriate treatment to reduce their environmental impact.
• We use appropriate methods to identify the volume of greenhouse gas emissions and strive to reduce emissions based on targets.
• We identify the volume of water usage and strive to reduce usage and reuse water. When wastewater is discharged, we carry out the appropriate treatment to reduce its environmental impact.
• We review our business activities from the perspective of a circular economy and strive to reduce our environmental impact. When waste is generated, we strive to curtail the generation thorough reduction, reuse, and recycling. In addition, we properly dispose of the waste generated in accordance with the laws and regulations of each country and region where we conduct business activities.
• We promote green procurement by selecting raw materials, products, and services with low environmental impact and employing environmentally-conscious companies.
• We take steps to protect biodiversity.

5．Establishing a corporate governance system

• We engage in sound corporate management and establish a highly transparent corporate governance system.
• We strive for timely and appropriate information disclosure in order to engage in sustainable business activities.
• We strengthen the risk management system in order to avoid or reduce loss.
• To prepare for unforeseen circumstances, we establish a business continuity plan (BCP) and work to enhance our business continuity capabilities when conditions are normal.

6．Promoting fair business activities

• We engage in fair and equitable transactions in good faith. We do not make unilateral and unreasonable demands. We do not abuse our advantageous position or act to place trading partners at a disadvantage.
• We comply with competition laws in each country and region where we conduct business activities and do not act to impede fair and transparent competition.
• We strive to practice appropriate management and prevent corruption in our relationships with government and public officials in each country and region where we conduct business activities. We do not offer or accept money, gifts, or entertainment that exceed social norms in our relationships with trading partners.
• We do not engage in conflicts of interest.
• We provide trading partners with accurate information on products, services and transaction methods.
• We do not infringe on the intellectual property rights of others in the products and services we provide.
• We comply with trade-related laws and regulations in the country and region of the transaction location and practice proper trade management for the import and export of goods, the provision of technology, and intermediary trade transactions.
• We practice responsible mineral procurement.
• We prohibit any interactions with crime-related individuals or groups.
• We do not engage in insider trading based on unpublished, important information obtained in the course of transactions.

7．Quality and safety improvement

• We establish and operate a quality management system for products and services.
• We ensure the quality and safety of products and services by practicing the necessary management of traceability and other measures. We act promptly to solve any issues that arise.
• As a general rule, we prohibit the use of substances in our supply chain whose manufacture or use is prohibited by law.
• We provide information necessary in the supply chain to ensure safety and quality control for our products.

8. Managing information security

• We prevent any leakage of confidential information, while protecting personal information appropriately in our own company and in the supply chain.
• We implement measures to protect against computer and network threats.

9．Communicating with the local community

• We implement social contribution activities from the perspective of sustainability and contribute to the development of the international and local community.

10．Deployment throughout supply chain

• We ask all participants in our supply chain to implement the same intent outlined in these Guidelines.

Revised April 1, 2025