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Governance

The Sumitomo Chemical Group places governance at the bedrock of its corporate management. We work hard at staying in compliance with applicable laws and regulations, as well as all ethical principles.

More than ever, companies are expected to fulfill their responsibilities to society. For Sumitomo Chemical, the spirit and the letter of compliance have been enshrined in our business principles since our beginnings. Our “Sumitomo Chemical Charter for Business Conduct” guides all employees and forms the backbone of daily compliance.Infographic visualizing a pyramid structure of Sumitomo Chemical's governance.

The Sumitomo Chemical Charter for Business Conduct and Code of Ethics embodies the Sumitomo Spirit and Business Philosophy.

Sumitomo Chemical created the Charter for Business Conduct to embody the Sumitomo Spirit, Business Philosophy, and Sustainability Principles.

We believe in conducting business to the highest ethical standards. The “Sumitomo Chemical Charter for Business Conduct” outlines our compliance principles:

  1. We will respect Sumitomo’s business philosophy and act as highly esteemed good citizens.
  2. We will observe all laws and regulations, and will carry out activities in accordance with our corporate rules.
  3. We will develop and supply useful and safe products and technologies that will contribute significantly to the progress of society
  4. We will engage in voluntary and active initiatives to achieve zero-accident and zero-injury operations and preserve the global environment.
  5. We will conduct business transactions based on fair and free competition.
  6. We will endeavor to make our workplaces sound and energetic.
  7. We will all strive to become a professionals and achieve advanced skills and expertise in our field of responsibility.
  8. We will actively communicate with our various stakeholders, including shareholders, customers, and local communities.
  9. As a global company, we respect every region’s culture and customs and contribute to their development.
  10. We strive for the ongoing development of our Company through business activities conducted in accordance with the principles described herein.

ENVIRONMENT

The Sumitomo Chemical Group is working hard to reduce its environmental impact. We set goals that include protecting air, water, soil, biodiversity, conserving resources, managing waste, and handling chemicals responsibly. Each worksite is striving to enhance initiatives aimed at achieving these goals.

We are focusing on the following specific measures.

  1) Appropriate Response to Laws and Regulations

  • We carefully manage construction plans to comply with the Soil Contamination Countermeasures Act. This ensures proper responses to soil changes and expands opportunities for contamination surveys.
  • We strengthened the evaluation and management of environmental risks for substances likely to be regulated under the PRTR Act.
  • We are upgrading refrigeration units from CFCs and HCFCs to low-GWP HFCs or non-fluorocarbon refrigerants. (Ozone Layer Protection Law). We also minimize fluorocarbon leaks from refrigeration and air conditioning equipment. (Act for Rationalized Use and Proper Management of Fluorocarbons)
  • We will systematically remove all electronic equipment that uses Polychlorinated Biphenyl (PCBs) (in storage or in operation) by March 2025. (Act on Special Measures against PCB Waste) Reducing Environmental Impact

  2) We will continue pursuing medium- and long-term targets for air, water, soil, and waste at our production sites.

  • ADDRESSING CLIMATE CHANGE
  • The Sumitomo Chemical Group considers climate change to be one of the most pressing challenges facing society. By utilizing the technology we have developed as a diversified chemical company, we are working to reduce greenhouse gases. We are also responding to climate change risks and opportunities that are already impacting people’s lives.
  • Science-Based Target Initiative
  • Science-based targets (SBTs) are greenhouse gas emissions reduction targets set by companies, based on climate science, to meet the 2015 Paris Agreement. The goal of the Paris Accord is to keep average temperature increases below 2°C compared to pre-industrial temperatures. In March 2018, medium to long-term plans for greenhouse gas (GHG) reductions were deliberated at our management meeting and we agreed to establish science-based targets (SBTs) in accordance with the Science-Based Targets. In October 2018, Sumitomo Chemical gained approval from the Science-Based Targets initiative for the company’s Group-wide greenhouse gas emissions reduction targets. Sumitomo Chemical is the first diversified chemical company in the world to have obtained this approval.
  • STAKEHOLDER ENGAGEMENT
  • Sumitomo Chemical defines sustainability as contributing to a sustainable society while also achieving our own sustainable business growth. This principle reflects our Sumitomo Spirit, which calls on us to unite business and society and enhances our corporate value.
  • Since FY2014, we have advanced employee engagement projects with support from top management and business segments. All officers and employees participate with their own ideas and initiatives.
  • RESPECT FOR HUMAN RIGHTS
  • Sumitomo Chemical regards respect for human rights as essential for ensuring the sustainability of its business. In 2019, we established the “Sumitomo Chemical Group Human Rights Policy” and the “Human Rights Promotion Committee.” The latter is tasked with overseeing the Group’s sustainability promotion activities, based on: the Universal Declaration of Human Rights, the International Labor Organization Declaration on Fundamental Principles and Rights at Work, the Ten Principles of the United Nations Global Compact, and the United Nations Guiding Principles on Business and Human Rights.

SUMITOMO CHEMICAL GROUP HUMAN RIGHTS POLICY (EFFECTIVE APRIL 1, 2019)

Sumitomo Chemical Group (Sumitomo Chemical Co., Ltd. and its Group Companies) has put in place this Human Rights Policy (“Policy”) to demonstrate its commitment to international standards on human rights. All directors, executive officers, and employees (“Personnel”) of the Sumitomo Chemical Group will uphold this Policy.

1. Our Position on Human Rights

  1. Compliance with Standards, Laws, and RegulationsWe support and respect international standards on human rights, such as the Universal Declaration of Human Rights and the International Labor Organization (ILO) Declaration on Fundamental Principles and Rights at Work. We promote respect for human rights in line with the United Nations Guiding Principles on Business and Human Rights. Sumitomo Chemical Co., Ltd. is a signatory to the United Nations Global Compact and supports its Ten Principles, which include human rights and labor. We comply with applicable laws and regulations in countries and regions where we operate, and where local laws and regulations conflict with international standards, we will seek ways to honor the principles of internationally recognized human rights.
  2. Respect for Human Rights in Our Business ActivitiesWe do not discriminate against individuals based on employment status, age, sex, ethnic or social origin, ancestry, nationality, disability, religion, beliefs, marital status, or any other status. We do not tolerate any form of harassment, including sexual harassment or workplace bullying. We also respect fundamental labor rights, including freedom of association and the right to collective bargaining, and prohibit forced labor or child labor. We are committed to respecting human rights in our business activities and strive to avoid contributing to the infringement of human rights. In order to prevent and mitigate human rights risks related to our business activities, we will take necessary measures, including ensuring compliance with the Compliance Manual (the Sumitomo Chemical Code of Business Conduct) and other relevant policies and guidelines. We are also committed to understanding our impact on local communities and aim for harmonious coexistence with these communities. We expect our business partners, including our suppliers and other relevant stakeholders, to act in line with the principles in this Policy, and we will seek ways to work with them to promote respect for human rights.

2. Our Approach to Human Rights Issues

  1. Providing Education and Raising Awareness:We will provide appropriate education and training to our Personnel so that this Policy is understood and effectively implemented.
  2. Human Rights Due Diligence: We will identify adverse human rights impacts and will seek to prevent or mitigate such impacts through our human rights due diligence framework.
  3. Responding to Identified Human Rights Impacts:We will engage with relevant stakeholders in order to address actual or potential adverse human rights impacts.
  4. Remedy: Where we identify that we have caused or contributed to adverse human rights impacts, we will endeavor to remediate such impacts through appropriate processes.
  5. Grievance Mechanisms: We have grievance mechanisms in place in the form of the Speak-Up Reporting System (whistle-blowing channels) in order to address concerns about activities that may adversely impact human rights, or any other concerns raised about our business activities. These channels are available for anyone involved in Sumitomo Chemical Group’s business activities, including their business partners as well as Sumitomo Chemical Group Personnel and their families. We will continuously seek to optimize our grievance mechanisms.
  6. Disclosure: We will report on our efforts to respect human rights including through our website, integrated report, Sustainability Data Book, and other relevant channels.

MEASURES AGAINST SLAVERY AND HUMAN TRAFFICKING

Sumitomo Chemical Group issued a statement on our operations and measures against modern slavery and human trafficking. Our position complies with international laws on slavery prevention and reflects our commitment to human rights.

SUMITOMO CHEMICAL GROUP STATEMENT AGAINST MODERN SLAVERY AND HUMAN TRAFFICKING

  1. About the Statement This statement is made pursuant to Part 6, Section 54 of the Modern Slavery Act 2015 (the United Kingdom), the Modern Slavery Act 2018 (Australia), and the U.S. California Transparency in Supply Chains Act of 2010 with consideration for the requirements of the other laws and regulations in relation to modern slavery, human trafficking, forced labor, child labor and respect human rights and constitutes the slavery and human trafficking statement for Sumitomo Chemical (“SCC”) group of companies in scope for purposes of such Acts (“SCC Group”) for the financial year ending March 2020. The statement is approved by the board of directors of SCC.
  2. Our Business SCC Group, comprising 170 subsidiaries, operates businesses worldwide, including the United Kingdom and Australia, in five sectors – petrochemical, energy & functional materials, IT-related chemicals, health & crop sciences, and pharmaceuticals – and provides products worldwide that support a wide variety of industries and help people’s daily lives.
  3. Our Supply Chain As SCC Group’s supply chains span and cover worldwide, wherever it engages in business, SCC Group considers that appropriate management of the supply chains is vital for operating its sustainable business.
  4. Our Philosophy and Initiatives against Modern Slavery and Human Trafficking
    1. Our Philosophy With the Sumitomo Spirit as its cornerstone, SCC Group has steadily forged ahead for more than 100 years. Sumitomo Chemical’s Corporate Philosophy is based on Sumitomo’s Business Principles and is composed of the Business Philosophy, which integrates the company’s business principles, mission, and values; the Corporate Slogan and Statement, which outlines the commitment and pride to be shared in common by directors, officers, and employees; and the Sumitomo Chemical Charter for Business Conduct, which lays out the code of behavior serving as the basis for the Company’s compliance system.
    2. Initiatives to Ensure Compliance by SCC Group and its Supply Chains To ensure compliance with applicable laws, regulations and ethical standards against modern slavery and human trafficking in SCC Group’s operation or its supply chains, SCC Group has been vigorously carrying out the following initiatives.
      1. Policy SCC Group has in place in each of the companies a code of conduct, which sets forth a requirement that all relevant personnel must respect the human rights of others and comply with applicable laws, regulations, and ethical standards. In April 2019, SCC Group established the “Sumitomo Chemical Group Human Rights Policy” based on the Universal Declaration of Human Rights, the International Labor Organization Declaration on Fundamental Principles and Rights at Work, the Ten Principles of the United Nations Global Compact and the United Nations Guiding Principles on Business and Human Rights, that includes the prohibition of forced labor and child labor.
      2. Risk Assessment and Due Diligence SCC Group has been undertaking human rights due diligence, assessing and rectifying the human rights violation risk within its business activities in accordance with the Guiding Principles on Business and Human Rights with the aim of ensuring respect for human rights through business activities. In due diligence, first, SCC Group identifies human rights risks within its business by establishing risk indicators based on the nature of our business and the regional characteristics of the SCC Group’s business activities and scoring those risks. Second, SCC Group, together with external experts, will conduct follow-up investigations into those companies and businesses that ranked high-risk scores including additional on-site investigations as necessary. If, as a result of this human rights due diligence process, it is determined that the SCC Group’s business activities may be causing or contributing to adverse human rights impact, we will engage with relevant stakeholders and rectify and remediate such impact through appropriate measures.
      3. Supply Chain Management It is SCC Group’s policy to procure supplies such as raw materials and packaging materials from suppliers that operate their business in a socially responsible manner, including operating their business free from modern slavery or human trafficking. SCC Group has been encouraging the existing suppliers and future candidates to enhance their efforts on Sustainability activities through various initiatives. As part of these initiatives, SCC Group has set a procurement standard under which SCC Group will preferentially procure from suppliers who are most active in Sustainability activities. This policy is set out in the Group Business Standard of Procurement, which provides guidelines for procurement operating activities for SCC Group companies in Japan and overseas. Also, SCC Group has compiled five categories in the Sumitomo Chemical Group Sustainable Procurement Guidebook. The second category of this Guidebook prescribes “Human Rights and Labor” and expressly prohibits forced labor and child labor. This Guidebook address further issues such as “Respecting human rights”, “Regulating working hours”, and “Paying appropriate wages”. This Guidebook establishes the overarching guidelines encompassing our commitment to combating modern slavery and human trafficking. Furthermore, SCC has formulated the Sumitomo Chemical Group Sustainable Procurement Check Sheets to enable suppliers to demonstrate their consistency with our Sustainability policies. SCC monitors the implementation of Sustainability measures by all new suppliers and by current suppliers of raw materials, especially those located outside Japan, via the Sustainable Procurement Check Sheets. Every year, SCC monitors around 10 to 20 new suppliers and around 30 to 40 current suppliers in cooperation with each group company. For suppliers who need to follow up on problems revealed by the monitoring, SCC Group provides feedback, including focused requests for improvement, guidance, and training. By seeking to raise awareness and cooperate in ensuring responsible procurement, SCC Group aims to prosper alongside our suppliers. However, this monitoring process is not an independent and unannounced audit. We are currently in the process of revising our standard contractual terms to incorporate a human rights clause that requires us to promise and certify compliance with laws and regulations in respect of the management of human rights risk including prohibition of modern slavery, human trafficking, forced labor and child labor.
      4. Compliance Education and Training All companies of SCC Group have been devoting earnest efforts to ensure strict compliance with applicable laws, regulations, and ethical standards on modern slavery and human trafficking, and periodically providing its members with educational training sessions by utilizing both face-to-face seminars and e-learnings.
      5. Speak-up System SCC Group places high importance on building an internal system, in order to capture at an early stage signs of compliance violation, including any concern of SCC Group’s business having been involved in modern slavery or human trafficking, and to make sure those issued detected are removed promptly and that appropriate measures are taken swiftly. The SCC Group has adopted a dual-channel Speak-Up System equipped with an internal Speak-Up hotline and an external Speak-Up hotline, which accept reports not only from the headquarters of the Sumitomo Chemical Company but also from all Group companies as long as relevant laws of their respective countries permit it. Under the System, any employee can report any violation or suspected violation of compliance to his or her company’s compliance committee or other similar governing committee via either its internal hotline or an external hotline. The external hotline is usually operated by an outside lawyer appointed by the company. Suppliers in our supply chains or anyone having any involvement in the company’s business activities can also report their concerns. The SCC Group received approximately 140 cases of speak-up reporting in total.
    3. Corporate Social Responsibility Initiatives To resolve serious global issues such as modern slavery and human trafficking, SCC Group believes that it is important to collaborate with international institutions along with promoting its own Sustainability initiatives against modern slavery and human trafficking. For that reason, since 2005, SCC Group has been participating in the UN Global Compact, an initiative that seeks to advance universal principles (the “Ten Principles”) on human rights, labor, environment, and anti-corruption. Also, in light of the contributions made and its firm commitment, SCC Group has later joined the UN Global Compact LEAD, an exclusive group of sustainability leaders from across all regions and sectors that represent the cutting edge of the UN Global Compact, when it was launched in 2011. Through these initiatives, the SCC Group will contribute to the sustainable development of society and also help achieve the UN Sustainable Development Goals (SDGs) that are to be resolved across the globe by 2030, which includes taking immediate and effective measures to eradicate forced labor and end modern slavery and human trafficking as one of the goals.
  5. Looking Ahead SCC Group believes that the promotion of respect for human rights and ensuring compliance with applicable laws, regulations, and ethical standards, including those relevant to modern slavery and human trafficking, is vital for operating its business in a sustainable manner. As such, SCC Group will continue its initiatives as described above, to identify and address any issues associated with modern slavery and human trafficking throughout its global operations and supply chains.
  6. Process of Consultation The SCC Group’s overall human rights program, which includes the modern slavery and human trafficking initiatives, is developed and implemented group-wide under the leadership of the Human Rights Promotion Committee, which reports to the Board of Directors. Through the committee, a cross-functional team, together with the respective internal business units representing each business sector, works to integrate group-level measures of accountability for promoting respect for human rights risks, including the prohibition of modern slavery, forced labor, and child labor, and to embed our initiatives and supporting processes across the SCC Group.

1st April 2020

Keiichi Iwata
Representative Director & President, Sumitomo Chemical Company, Limited

SAFETY AND RESPONSIBLE CARE

Sumitomo Chemical Group makes safety, environmental protection, and product quality top priorities across all business activities.

Responsible Care (RC) activities are voluntary initiatives by businesses to ensure safety, environmental protection, and health. They cover chemical products from development through production, sales, use, and final disposal.

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