Supplier Sustainability Guidelines

Creation of a working environment based on respect for our employees

It is important to create an environment where workers can trust the company and develop a culture that promotes human development.

Manufacturing based on Genchi-Genbutsu (fact-finding by actually going and seeing)

It is fundamentally important to thoroughly observe the actual scene of manufacturing and try to identify the root cause that may be behind any phenomena.
We attach importance to seeing the essence of a problem, making decisions through team activities, and executing them to the best of our ability.

Continuous Kaizen

It is important to always pursue evolution and innovation, and never cease to seek improvement.

Two-way communication

We strive to maintain close communication with our suppliers, exchanging ideas frankly and coming to terms with each other on all matters of importance.

Safety

Manufacturing requires human hands, and good quality products can be made only when a safe and healthy working environment is maintained. We expect suppliers to create a safe working environment where workers can work with peace of mind.

Quality

There is a saying that goes, “There is no growth for a company unless its quality improves.” During the launch phase of a new product, we expect suppliers to build, at each manufacturing stage, a self-contained process that does not allow defective items to be made or sent to the subsequent process. Also, to ensure quality during mass production, we expect suppliers to visualize problems of in-process defects and take corrective action speedily when problems are found.

Delivery and production

The Toyota Boshoku group produces “only what is needed, only when it is needed, and only in the amount that is needed.”
To realize this, we expect suppliers to flexibly and appropriately respond to our requests in the stages of production preparation, production, and delivery.

Costs

We expect suppliers to offer the best cost competitiveness in the world. For this, it is important for suppliers to seek innovation in technological development and production technology, and pursue cost reduction activities on a continuous basis.

Technology

The importance of technology is growing in the three areas of environmental protection, safety, and comfort.
In addition to these expectations of society and the global environment, we expect suppliers to accurately grasp the needs of customers and endeavor to embody them ahead of their competition. We also expect suppliers to offer new technologies at low prices so that their benefits can be enjoyed by as many customers as possible.

1.Compliance

Compliance with laws and regulations

• Comply with laws and regulations related to corporate activities, guidelines issued by public agencies, social norms, etc.
• Establish and operate systems to comply with laws and regulations, education and training systems, etc. and regularly check their effectiveness.

Management of confidential information

• Handle confidential information with the utmost care, and, for this, establish the necessary mechanisms to manage such information.
• Handle information obtained from outside the company in the same careful way as internal confidential information and limit its use within the scope permitted under its purpose.
• Properly collect and strictly manage personal information in accordance with the methods specified in relevant laws and regulations, and use such information only within the scope allowed.

Protection of intellectual property rights

• Continually monitor and protect all intellectual property rights, etc. owned by or attributable to the company against any infringement by third parties.
• In developing technologies and products, conduct sufficient research in advance to avoid violating other companies’ intellectual property rights, including patents.
• Do not use copyrights, etc. (including copyrights on software) without permission or make unauthorized copies.

Free competition and fair trade

• Strive to ensure fair competition with competitors, and do not engage in acts that hinder free competition, such as private monopolies and unreasonable restraint of trade (cartels, bid rigging, etc.).
• Conduct business with suppliers in a fair and equitable manner and do not make unfair demand on suppliers.

Export control that complies with security requirements

• When exporting products, technologies, etc., fully understand and comply with the laws and regulations related to export control.

Anticorruption

• Strive to build fair and transparent relationships with political parties and administrative bodies, and do not make political donations or contributions that violate what is permitted under laws and regulations.
• Do not provide or receive gifts, entertainment or money to or from customers, suppliers or other business partners for the purpose of obtaining or maintaining unfair advantage or undue preferential treatment.
• Do not conduct off-the-book, fictitious or otherwise falsified transactions, or any other similar acts prone to be misconstrued as such, and make and keep books, records and accounts (ledger sheets and account ledgers, etc.), which, in reasonable detail, accurately and fairly reflect transactions and the disposition of assets.

2.Respect for human rights, maintaining working conditions

Toyota Boshoku Group Human Rights Policy

As a corporate member of society, the Toyota Boshoku group has established the Toyota Boshoku Group Human Rights Policy in recognition of the importance of respect for human rights in all of our activities and to facilitate respect for the human rights of all people involved in our business. In accordance with international norms such as the Universal Declaration of Human Rights, with the United Nations Guiding Principles on Business and Human Rights is serving as an implementation framework.
This policy applies to all directors and employees of the Toyota Boshoku group. We also expect all stakeholders, including suppliers involved with the Toyota Boshoku group’s products and services, to understand and support this policy.

Toyota Boshoku Group Human Rights Policy

Non-discrimination, respect for diversity and inclusion

• Do not tolerate any form of discrimination on the basis of race, ethnicity, religion, nationality, creed, gender, age, disability, sexual orientation, gender identity, marital status, or the presence of children with regard to all aspects of employment, including the application process, hiring, promotion, compensation, access to training, job assignment, wages, benefits, discipline, dismissal and/or retirement.
• Promote diversity and inclusion initiatives.

Prohibition of harassment

• Do not tolerate any form of harassment including sexual harassment, power harassment, and peer pressure, or any acts that hurt the dignity of an individual.
• Harassment may involve verbal, visual, or physical conduct that negatively interferes with work performance, diminishes the dignity of any employee, or creates an intimidating, hostile or otherwise offensive work environment.
• Immediately report and investigate any harassment complaints. Enable employees to report any instances of harassment without fear of reprisal, intimidation, or harassment.

Prohibition of child labor

• Do not tolerate child labor which deprives children of their childhood or access to education, or restricts their development.
• The minimum age for employment shall be 15 years of age, the legal minimum age for employment, or the age for completing compulsory education, whichever is higher under the local applicable laws and regulations, etc.
• Do not use employees under 18 years of age for hazardous work.
• Job training and apprenticeship programs are subject to the local applicable laws and regulations, etc.

Prohibition of illegal migrant labor, forced labor

• Do not tolerate any form of forced labor, which is often extracted through violent and threatening means or by debt entrapment, or any form of modern slavery including human trafficking.
• Ensure that all work is voluntary and that employees are free to terminate their employment if they so desire.
• Do not require employees to surrender passports, government-issued identification, or work permits as a condition of employment. Do not collect recruitment fees or other fees that are considered unreasonable under international norms.

Wages

• Pay wages in compliance with local applicable laws and regulations, etc., including those relating to minimum wages, overtime hours, deductions, piece work rates, and other elements of compensation.
• Ensure that wages, other compensation, benefits, and deductions are detailed and explained, in compliance with local applicable laws and regulations, clearly and regularly to employees.

Appropriate management of working hours

• Comply with local laws, regulations, and other rules related to labor, and appropriately manage the working hours of employees.

Freedom of association

• Recognize the employees’ right to freely associate or not associate, complying with local applicable laws and regulations.
• Ensure that employees are able to communicate openly and directly with management without fear of reprisal, intimidation, or harassment.

Creating a safe and healthy working environment

• Place the highest priority on ensuring the safety and health of employees at work and strive to prevent accidents and disasters.
• Support efforts to improve the health of employees through health promotion activities at work and guidance for preventing illness, and other means.

3.Efforts to conserve environment

Environmental management system

• To contribute to the realization of a sustainable society, in addition to complying with the applicable environmental laws and regulations of each country and region, establish and continuously improve the environmental management system, and strive to improve environmental performance.

Reduction of greenhouse gas emissions

• Strive to reduce greenhouse gas emissions throughout the entire life cycle, including at business sites, by developing products and services that will reduce greenhouse gas emissions and by reducing emissions from production activities, and also promote effective use of energy.
• With the aim of achieving carbon neutrality, not only track greenhouse gas emissions, but also work collaboratively with suppliers to plan and promote all kinds of reduction measures, such as energy conservation, equipment improvement, material replacement, and the introduction of renewable energy.

Prevention of environmental pollution such as air, water, and soil pollution, and effective use of water resources

• To prevent air, water, soil, and other environmental pollution, in addition to complying with local applicable laws and regulations, monitor output continuously and reduce pollutants.
• Taking into consideration the water environment of each country and region, strive to reduce water consumption and wastewater discharge and use water resources effectively.

Contribution to establishing a sound material-cycle society and systems

• When designing and developing products, reduce consumption of exhaustible resources and utilize recycled materials, while considering their recyclability at the time of disposal. Comply with the laws and regulations of each country or region concerning proper disposal and recycling of wastes, and work to reduce and recycle waste discharged from business sites and logistics operations.

Management of chemical substances

• Manage chemical substances (containment, elimination, reduction in use) in compliance with the relevant laws and regulations of each country or region.
• Do not use prohibited substances in products, production processes, etc.
• For chemical substances designated by laws and regulations, report appropriately to administrative agencies as required by applicable laws and regulations.

Establishment of a society in coexistence with nature

• Based on the recognition that business activities are heavily dependent on the blessings of nature created by biodiversity and may affect the ecosystem, strive to achieve harmony with the community and to realize a society in coexistence with nature.

4.Contribution to society through business activities

Responsible purchasing of resources and materials

• Promote the purchasing of materials with consideration of the impact on the local community from the use of materials that can cause social problems such as human rights infringement and environmental damage (e.g., conflict minerals), and take appropriate measures to avoid the use of such materials if any problem or concern exists.

Social contribution activity

• Promote social contribution activities that support the development of society, and actively participate in activities of local communities so as to be a company that is trusted by society.

Timely and appropriate information disclosure

• Disclose information needed by stakeholders in an accurate and timely manner and promote good communication with local communities.

5.Risk management

Ensuring information security

• Take protective measures (cyber security, etc.) against threats on computer networks to prevent damage to the company and others due to leakage of confidential information, etc., including the provision of employee training on information security.

Creating and implementing a business continuity plan

• Create and implement a Business Continuity Plan (BCP) to enable quick recovery of business activities after a disaster or accident.

6.Developing and deploying guidelines for your suppliers

• Develop sustainability guidelines for suppliers based on the guidelines outlined above and disseminate them to your suppliers to ensure that they are involved in sustainability initiatives.
• Promote the above activities in consideration of the entire supply chain, and conduct follow-up and corrective actions as needed.

7.Compliance with Sustainability Guidelines

• The Toyota Boshoku group will address compliance with these guidelines throughout the entire supply chain which supports our manufacturing efforts. We ask all of our suppliers to carefully read and understand these guidelines and take the initiatives necessary to ensure that they penetrate down through their supply chain.
• We also ask our suppliers to conduct an annual self-assessment of the status of penetration of, implementation of, and compliance with these guidelines using the Supplier Self-Check Sheet.
• To confirm the compliance status for these guidelines and for mutual communication, if necessary, there may be times when we visit your plant or other facilities.
• If a problem that violates these guidelines should occur, we ask that you report it immediately and take steps to make the necessary improvements. In the unlikely event that appropriate countermeasures are not taken, this may result in the cancellation of business orders.