CSR Procurement

At SUBARU, the procurement departments of the Automotive Business and Aerospace Company participate in the Purchasing Committee, which promotes SUBARU’s CSR procurement initiatives.
The action policy of the Purchasing Committee is to facilitate fair procurement practices and encourage CSR at suppliers, thereby helping to ensure fair trade between SUBARU and its business partners and cooperative CSR-based procurement throughout the supply chain. We have also been promoting CSR procurement on a global scale in collaboration with Subaru of Indiana Automotive, Inc., our local production plant in the U.S.

CSR Procurement System

Promoting Fair Trade

SUBARU maintains compliance with laws and regulations such as the Antimonopoly Act and the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors. SUBARU also carries out fair trade promotion initiatives based on Automobile Industry Fair Trade Guidelines. As part of these efforts, SUBARU has set up a consultation service targeting suppliers in its supply chain. In 2020, we took the Partnership Formation Oath for the purpose of coexistence and prosperity of both large companies and SMEs.
For employees, we provide legal and regulatory training and other programs for those in charge of procurement to elevate their understanding of proper business practices.

Consultation service for promoting fair trade (Japanese version only)

Partnership Formation Oath (Japanese version only)

SUBARU Supplier CSR Guidelines

To promote SUBARU’s CSR procurement and help our suppliers conduct CSR activities, we created, and in FYE March 2012 began application of, the SUBARU Supplier CSR Guidelines. They are based on the CSR Guidelines for Suppliers of Japan Automobile Manufacturers Association, Inc. (JAMA), and incorporate our CSR policy.
In FYE March 2014, these guidelines were made company-wide, including all suppliers of the Aerospace Company, and in FYE March 2016, SUBARU revised the content to incorporate the non-use of raw materials that engender social problems, such as conflict minerals.^*1 In FYE March 2016, we also revised the guidelines in the form of a joint edition with Subaru of Indiana Automotive, Inc., confirming the integration of the procurement policy. We incorporated the SUBARU Global Sustainability Policy, Human Rights Policy, and Fundamental Procurement Policy (revised edition) in FYE March 2021. In FYE March 2023, we will also establish and publish the Responsible Mineral Procurement Policy.
At SUBARU, compliance to these guidelines is one of the criteria of our supplier selection. SUBARU asks not only our suppliers but also their suppliers as well to develop and promote CSR.

*1

Conflict minerals: Minerals for which there is concern regarding participation in unjust acts, such as support for non-governmental armed groups, human rights violations, or illegal acts. In Dodd-Frank Act of the U.S., tin, tantalum, tungsten, and gold are specified as minerals for which there is concern that they may be a source of funding for armed groups in the Democratic Republic of the Congo and surrounding countries.

SUBARU Supplier CSR GuidelinesPDF/920KB

Five Topics in the SUBARU Supplier CSR Guidelines

SUBARU promotes our procurement activities based on the following basic approach.

Business Partner CSR Briefing and CSR Survey

At the Business Partner CSR Briefing, we present corporate policies such as the SUBARU Supplier CSR Guidelines in keeping with the OECD Due Diligence Guidance for Responsible Business Conduct. In our annual Business Partner CSR Survey, we assess negative impact on our business partners and work with them to correct any issues discovered.
In FYE March 2022, we took the following actions with a scope of 598 automobile-related business partner companies (including 388 in parts and raw materials, and 210 in equipment and jig tools).

• We held the Business Partner CSR Briefing online via video distribution to help prevent the spread of COVID-19. In this briefing, we presented the importance of promoting CSR, details about the SUBARU Group’s CSR activities, and made specific requests to business partners (such as compliance with the SUBARU Supplier CSR Guidelines).
• We investigated business partners’ CSR systems, CSR initiatives for their suppliers, and compliance with the SUBARU Supplier CSR Guidelines, identifying two business partners with potential issues with compliance in their initiatives. Follow-up investigations were conducted with the two companies through interviews. These companies promised to make improvements before the continuation of the investigation in the next fiscal year. The above results were referenced in supplier selection.
• We investigated business partners regarding non-Japanese employees and identified three suppliers with potential issues. Follow-up investigations were conducted with the three companies through interviews. In all cases, the conclusion was that there were no issues with treatment regarding non-Japanese worker human rights and labor.
• In FYE March 2022, we conducted new investigations on human rights initiatives, including for any human rights due diligence (DD) conducted either internally or within the supply chain, risk content (country, region, ethnicity, company name, specific information, etc.) in cases where DD is conducted and risks are identified, and the results of responses to these risks. In our FYE March 2022 investigations, we found no issues among our business partners.

We will continue to conduct these initiatives in FYE March 2023 and beyond, potentially conducting on-site audits of our business partners while taking into consideration the state of the spread of COVID-19.

Consultation Service for Non-Japanese Workers

In addition to our existing consultation service for promoting fair trade, we are newly participating in the Japan Platform for Migrant Workers towards Responsible and Inclusive Society (JP-MIRAI) Consultation and Relief Pilot Project for Migrant Workers, and are striving to establish a consultation service for foreign workers in the supply chain in Japan.

JP-MIRAI

Responsible Mineral Procurement

The SUBARU Group has no intention of colluding in the infringement of human rights and environmental destruction by procuring and using conflict minerals. In FYE March 2022, we expanded the scope of our conflict mineral survey from 210 suppliers of components and materials, limited to certain vehicle models, to 361 suppliers of automotive components and materials for all models produced during the survey period. We also conducted a cobalt survey for some of our business partners in FYE March 2022. We will work to roll out surveys regarding minerals other than these conflict minerals (tin, tantalum, tungsten, and gold).
Going forward, SUBARU’s policy is to work toward “No use of materials engendering social problems” in partnership with our customers and suppliers as our social responsibility in procurement activities. As one of our efforts, we have now codified our Responsible Mineral Procurement Policy as follows.

Established in May 2022

Green Procurement Guidelines

The SUBARU environmental policies state that “Our purchasing activities reflect consideration for biodiversity and other aspects of environmental protection.” We promote the procurement of parts, materials, and services from business partners who implement business activities that consider the environment. In addition, SUBARU has expressed in the SUBARU Green Procurement Guidelines its expectations for business partners regarding environmental initiatives. The guidelines primarily request cooperation in the following 10 areas:

Compliance to these guidelines is considered a necessary criterion for selecting business partners, and we recommend new business partners to formulate an EMS with the acquisition of ISO 14001^*2 third-party certification at its base. Currently, all of our Tier 1^*3 business partners have already acquired ISO 14001 certification. In case our new business partners have difficulty acquiring ISO 14001, we review their compliance status by having them submit voluntary assessment reports based on our EMS, while supporting them with the acquisition of Eco Action 21^*4.
To those business partners who have passed our voluntary examination, SUBARU makes inquiries or performs audits as necessary and requests them to continue efforts toward early acquisition of third-party certification for environmental management.

*2

International standard for environmental management systems (EMS) established by the International Organization for Standardization (ISO). It is a management system standard to certify that an organization considers the environment and has built a system for continuously reducing environmental impact.

*3

Companies that directly supply parts to car manufacturers. They are primary business partners. Tier 2 business partners are companies that supply Tier 1 with those parts that make up the Tier 1 company parts.

*4

Environmental conservation activity promotion program for SMEs formulated by Japan’s Ministry of the Environment that addresses three areas: environmental management systems, environmental efforts, and environmental reporting, based on the guidelines.

SUBARU Green Procurement Guidelines^*5PDF/1,215KB
Green Procurement Guidelines Aerospace Company Edition^*5PDF/837KB

*5

The SUBARU Green Procurement Guidelines and the Green Procurement Guidelines Aerospace Company Edition are concrete forms of topic “(3) Environment” in the SUBARU Supplier CSR Guidelines.

Management and Reduction of Environmentally Hazardous Substances Contained in Parts

SUBARU complies with laws and regulations concerning substances of concern in each country, including the REACH regulation^*6 and ELV Directive^*7. We perform usage surveys regarding chemical substances contained in parts to our business partners as necessary and continue to perform management of those substances. In addition, we are sequentially switching from materials that are prohibited by laws, regulations, or self-regulations such as industrial norms to alternative materials, and are working to reduce environmentally hazardous substances.
In addressing the REACH regulation, we disclose information about substances of very high concern (candidate substances for regulation) on our homepage for users of SUBARU vehicles in Europe.

*6

REACH regulation: European regulation on chemical substances requiring all chemical substances to be subject to management or restriction measures commensurate to the risk that they pose to humans and the environment.

*7

The End-of-Life Vehicles (ELV) Directive: European Union (EU) directive brought into force in 2000 to reduce the environmental impact from the scrapping of end-of-life vehicles in the EU. It aims to prohibit the use of hazardous substances and promote a reduction in waste products by encouraging the reuse or recycling of used vehicles and their parts.

Procurement with Consideration for Biodiversity

SUBARU surveys the use of biological resources, including cowhide and plant-derived materials, to ensure no negative impact on the ecosystem during procurement of raw materials. In FYE March 2022, we conducted an online interview-based verification survey of one cowhide fabric manufacturer and one tire manufacturer.
SUBARU also uses copy paper made from 100% recycled paper pulp that is not from new plant resources, and has switched to Forest Stewardship Council (FSC)-certified paper for envelopes used to mail paper payment guides. Furthermore, as part of our efforts to go paperless, in addition to providing payment guides for our business partners online, we are sequentially terminating paper output of system forms used in operations for maintenance parts and vehicle accessories as of January 2022. By developing a system for digitization in some functions, we are aiming for zero paper output from January 2023 onward.
Our dealerships in the U.S. have also introduced paperless systems starting in November 2021, which is expected to save more than 7,000 sheets of paper per year.

Communication with Suppliers

In our Automotive Business, we had been hosting Policy Briefings every spring to share policies on development, quality, procurement, and production with our business partners. However, in FYE March 2022 these briefings were held online in light of the spread of COVID-19. We also maximally leveraged online methods for other events, such as pre-recorded videos and live streaming. This was a year of exploring new ways of communicating with our business partners in keeping with the times while maintaining customer safety as our highest priority. Going forward, we will bring new forms of information exchange in collaboration with the Cooperation Meeting, with the premise of adapting to such environmental changes.
The Aerospace Company held the SUBARU Status Report Meeting with business partners in May and November 2021, followed by the 80 Business Partner and Company President Web Dialogue in January and February 2022.