As a company that develops diverse businesses globally, protecting supply chains is a fundamental concept that serves as the foundation of our management and reflects our corporate philosophy of “Living and prospering together with people, society, and the planet, we aim to be a value-generating corporation that contributes to the creation of prosperous societies.

The Toyota Tsusho Group has formulated the Supply Chain Sustainability Behavioral Guidelines, disseminates the guidelines to suppliers, and asks them to put the guidelines into practice. In addition, we strive to assess risks and identify issues through due diligence, and if issues are identified, we work to make improvements through dialogue with suppliers.
Going forward, we will make efforts to build a sustainable supply chain that takes human rights, labor environments, and the natural environment into consideration together with our suppliers.

For new investment and loan projects, we investigate the impact that the business will have on the environment and social.

The Toyota Tsusho Group is building a global supply chain; in order to promote business activities that reflect our concerns for human rights, occupational safety and health, the environment, and other fields of risk across our entire supply chain, we have established the Toyota Tsusho Supply Chain Sustainability Behavioral Guidelines. Available in Japanese, English, and Chinese, we share the Behavioral Guidelines with our business partners; we also conduct questionnaires and on-site surveys as part of our supply chain management.

With regard to suppliers who breach our Behavioral Guidelines, we try to understand the reasons for the breach and the present conditions, offer corrective advice and solutions, and ask them for their understanding and compliance in the future.

Referring to the United Nations’ Guiding Principles on Business and Human Rights, we are conducting human rights due diligence covering the supply chain based on the opinions of internal and external experts. We conduct risk assessments in the supply chain, conduct questionnaires of suppliers in high-risk fields and regions, and conduct on-site surveys by a third-party specialized organization to identify, prevent, and mitigate adverse impacts on human rights.

In the fiscal year ending March 31, 2024, we conducted a risk assessment of approximately 6,000 suppliers in our group and identified approximately 250 suppliers in fields and regions with high human rights risks.
As of July 2024, we are in the process of questinnnaire surveying approximately 250 suppliers in turn. And four of the approximately 250 suppliers have completed on-site surveys.
We did not discover any serious problems requiring an immediate response from those results.
However, during the on-site surveys, concerns were identified in terms of health and safety management. We have also checked the prompt improvement measures and countermeasures taken by our suppliers on problems raised as concerns at the time of the survey. And we will continue to promote remedial measures through dialogue with suppliers.

Similar to human rights due diligence, we have initiated efforts to address environmental due diligence within our supply chain. In the fiscal year ended March 2024, we began holding explanatory sessions for our major suppliers in Japan to inform them about our environmental policies. Moving forward, we will expand the scope of these sessions to include more suppliers and conduct on-site investigations based on the level of risk involved.

We conducted questionnaires and on-site surveys of suppliers in the apparel industry in fields with high human rights risks. As a result, we did not find any serious human rights issues that require immediate actions.

<Confirmation of Human Rights Initiatives>

We confirmed that when hiring, personnel managers work to comply with laws and regulations by, for example, checking IDs to ensure everyone hired is at least 18 years old, that a plant offers programs for maternity leave and reduced work hours, and that the company shows concern for employee work-life balance.

<Safety-Related Initiatives>

Plants pays attention to worker safety, requiring that workers operating cutting machines wear metal safety gloves to prevent accidents. In quality control, we confirmed that defective products result in a recall, followed by a meeting of a plant’s quality committee to determine the cause, and that customers are then provided with a report.

<Environmental Initiatives>

Offices and plant premises are clean, and even warehouse space is well-organized. We confirmed that paper and fabric scraps leftover from cutting patterns and cloth are recycled as part of a plant’s environmental initiatives.

Toyota Tsusho is a regular member of the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER), which provides the “Engagement and Remedy Platform” in accordance with the United Nations Guiding Principles on Business and Human Rights. This platform allows any stakeholder in the supply chain to report violations or suspected violations of international and national codes of conduct. By accepting grievances through third-party channels, we strive to ensure fairness and transparency, promote dialogue and redress more than ever, and remedy identified affected parties. When receiving reports, we ensure the anonymity of the person making the report and the confidentiality of the report.

Periodic updates of information in response to the report through JaCER, including the nature of the report and its status, will be disclosed on the website of JaCER while ensuring the anonymity of whistleblowers.

Establishment of an Inquiry Page for Sustainability We have established a system to accept opinions and requests from suppliers through an inquiry page on our website. The opinions and requests we receive are shared with the relevant departments within the company through a specialized organization and are linked to initiatives aimed at solving issues.

We have been conducting e-learning for all employees, as all employees may be involved in purchasing. In 2019, we conducted e-learning on supply chain management for all employees to raise employee awareness of environmental and human rights considerations throughout the supply chain. It was taken by more than 3,000 Toyota Tsusho employees. In 2020, we conducted e-learning on sustainability overall, including content related to our human rights policy and respect for human rights. It was taken by approximately 3,100 Toyota Tsusho employees. In 2022, we held a briefing session on our sustainability activities and supply chain management for sustainability officers of our overseas consolidated subsidiaries, and some consolidated subsidiaries held study sessions on human rights. In 2023, we held e-learning on human rights due diligence for all employees in advance of promoting human rights due diligence covering the supply chain. It was taken by approximately 3,100 Toyota Tsusho employees.

After receiving training on social and environmental issues from the Sustainability Management Group, our sales personnel subsequently hold study sessions for suppliers on the Toyota Tsusho Group Supply Chain Sustainability Behavioral Guidelines and Environmental Policy.
A Practical Safety Workshop handling safety management has been established at Toyota Steel Center Co., Ltd., one of our group companies, in response to a request from the Global Safety & Environmental Promotion Department. The Workshop is open to our group companies as well as our suppliers. With this initiative, we strive to eliminate industrial accidents throughout our supply chains.