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. The committee oversees efforts to address environmental, social, and governance (ESG) issues in procurement and shares the latest relevant information. By integrating any management issues identified into our action plans and implementing a plan-do-check-act (PDCA) cycle, we help to ensure fair trade between SUBARU and its business partners as well as cooperative CSR procurement throughout the supply chain. We have also been promoting CSR procurement on a global scale in collaboration with Subaru of Indiana Automotive, Inc. (SIA) , our local production plant in the U.S.

CSR Procurement System

Targets and Metrics

The SUBARU Group is strengthening its CSR initiatives in cooperation with business partners toward sustainable procurement on a global scale.

• Building relationships with business partners from CSR perspectives
  We aim to strengthen our relationship by conducting due diligence in accordance with international standards such as the OECD Due Diligence Guidance for Responsible Business Conduct and by establishing and operating a grievance mechanism.

• Promotion of fair trade on a continuous basis
  We are promoting initiatives for fair trade by thoroughly disseminating our voluntary action plan and thoroughness plan.

• Conducting conflict minerals, mica, and cobalt surveys
  We conduct investigations in compliance with international norms and standards, such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Approach to Risks

The SUBARU Group procures parts and materials from numerous suppliers. Fluctuations in raw material prices in cases where the Group is dependent on specific raw materials and suppliers, as well as disruptions in the supply chain and tight supply-demand balance in the event of an emergency, could affect the Group's management and financial position. We are also promoting initiatives to respect human rights among our business partners and other stakeholders involved in our business, including those in the supply chain. However, in the event of procurement or other activities that raise human rights issues, there is a risk of violation of related laws and regulations as well as damage to our brand image.
Recognizing these risks, the SUBARU Group strives to ensure stable procurement by reducing the impact of fluctuations through adjusting the amount of raw materials used, checking suppliers' quality assurance capabilities and management conditions, and identifying human rights risks.

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 conducts regular education for its employees and has set up a consultation service targeting suppliers in its supply chain to spread awareness. In 2020, we took the Partnership Formation Oath for the purpose of coexistence and prosperity of both large companies and SMEs.
The Aerospace Company conducts a survey for its business partners regarding satisfaction with its Purchasing Department. This allows better understanding of the current status of fair and proper transactions, including human rights considerations such as the conduct of those in charge of procurement at SUBARU, from the standpoint of its business partners.
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.

Employee Training on Fair Trade in FYE March 2024

Automotive Business Purchasing Division

(Employees)

Aerospace Company Purchasing Department

(Employees)

Note:

Years with zero employees are those with no new graduate hires or new transferees

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 and global, including for 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^*. In FYE March 2016, we also revised the guidelines in the form of a joint edition with overseas affiliate Subaru of Indiana Automotive, Inc., confirming the integration of our 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 also established and published 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.

*

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/494KB

These guidelines are current as of August 2024.
The Six Priority Areas for CSR have now evolved into the Six Priority Areas for Sustainability.
For more details, please refer to the link below.
Six Priority Areas for Sustainability

Six 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 also conduct a monitoring assessment of negative impact on our business partners and work with them to correct any issues discovered. We initiated this supply chain CSR due diligence in FYE March 2016 and have been conducting it annually since FYE March 2018.
In FYE March 2024, we targeted 622 automobile-related business partners (including 388 in parts and raw materials, and 234 in equipment and jig tools) to attend the briefing. Of these, 99.2% of participants, or 617 business partners, provided responses to the survey.
In June 2024, we also conducted a briefing and survey for our business partners focused on climate change.
The details and results of our actions are as follows.

Number of Business Partners Assessed in the CSR Survey Conducted in the Automotive Business Unit

Business Partner CSR Briefing

In the Business Partner CSR Briefings held with business partners, we presented the importance of promoting CSR in addition to human rights and environmental preservation, details about the SUBARU Group’s CSR Policy and activities, and made specific requests such as compliance with the SUBARU Supplier CSR Guidelines.

Business Partner CSR Survey

• SUBARU supplier CSR check sheet
  We investigated business partners’ CSR systems, CSR initiatives for their suppliers, and compliance with the SUBARU Supplier CSR Guidelines covering human rights, labor, and the environment, identifying one business partner with potential issues with compliance in their initiatives. A follow-up survey was conducted for said business partner through interviews, which confirmed that there were no problems with their actual initiatives.
  Furthermore, we continued to conduct follow-up investigative interviews with the business partner who faced issues in FYE March 2023. Through the interviews, we confirmed improvements in their initiatives, such as the establishment and dissemination of CSR policy and the appointment of CSR officers.
  In addition, we selected one company from among suppliers with satisfactory check sheet responses, and conducted interviews and factory inspections confirming that the responses were consistent.
  The above results are referenced in supplier selection.
• Survey on employment of non-Japanese skilled workers in Japan
  We conducted a survey regarding the employment of non-Japanese personnel by our business partners, examining wage levels, payment methods, working hours, Article 36 Agreement on overtime work and working on holidays (Labour Standards Act) in Japan, insurance, pensions, health checkups, living conditions, passport possession, Japanese language education, daily life guidance, and industrial accidents. Four business partners were identified as having potential issues. Follow-up investigations were conducted with the four companies. In all cases, the conclusion was that there were no issues with treatment regarding non-Japanese worker human rights and labor.
• Survey on human rights initiatives
  We conducted a survey on the implementation of human rights due diligence by our business partners and within the supply chain, information on the origin of high-risk raw materials in case risk has been identified through due diligence, including country, region, ethnicity, company name, other specific details, and the results of addressing these risks. This survey did not identify any business partners with potential issues.
  In the Aerospace Company, we continued to conduct the Business Partner CSR Survey for business partners in FYE March 2023 and confirmed that there were no issues.
  We will continue our activities in FYE March 2025 and beyond.

Consultation Service for Non-Japanese Workers

In addition to our existing consultation service for promoting fair trade, in FYE March 2023 we endorsed and cooperated with the supply chain human rights initiative, Japan Platform for Migrant Workers towards Responsive and Inclusive Society (JP-MIRAI), on the establishment of a consultation service for foreign workers in the supply chain in Japan. As background to this, employees of the Purchasing Division, including the general manager in charge, took part in JP-MIRAI’s “Consultation and Relief Pilot Project for Foreign Workers.”
We continued our participation with the “Collaborative Program for Companies Responsibly Hosting Foreign Migrant Workers,” which marked the full-fledged implementation of the program in FYE March 2024, targeting local business partners.
We provide support in 22 languages^* for the consultation service, the area of the program that SUBARU is involved in. This service is available not only for non-Japanese but also Japanese workers employed by business partners.
The consultation service covers a wide range of topics, from gathering information about daily life in Japan to addressing concerns related to human rights and labor issues. For matters that cannot be resolved through the consultation service, we provide accompanying support through consultations with specialists such as lawyers, or utilize the Tokyo Bar Association’s Alternative Dispute Resolution (ADR) for added assistance. This ensures a fair and transparent approach through third-party involvement.
We held a briefing for relevant business partners on the procedures for using the consultation service and requested that they disseminate the information among their employees.
The overall program, including the consultation service, has been developed by taking into account the feedback and input from companies and stakeholders, including suppliers, that participated in the pilot project.

*

Easy Japanese, English, Chinese, Korean, Thai, Vietnamese, Indonesian, Malay, Tagalog, Nepali, Myanmar, Khmer, Mongolian, Sinhalese, Hindi, Bengali, Portuguese, Spanish, German, French, Italian, and Russian

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. As a member of the Japan Automobile Manufacturers Association (JAMA), we have been actively participating in collaborative efforts addressing conflict minerals since FYE March 2015.
In FYE March 2024, we surveyed 402 suppliers of components and raw materials for automotive mass production and repair. We also conducted a cobalt survey for some of our business partners. In 2024, mica is to be added to the target minerals, and the mica/cobalt survey will be expanded to cover the same business partners as in the conflict minerals survey, which will be the basis for our conflict minerals, mica, and cobalt surveys. We will work to roll out surveys regarding minerals other than these conflict minerals (tin, tantalum, tungsten, and gold).

We codified our Responsible Mineral Procurement Policy in May 2022 as follows. 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.

Number of Business Partners Assessed in the Conflict Mineral Survey Conducted in the Automotive Business Unit

Established in May 2022

Environmental Policy Initiatives for Business Partners

We distributed the SUBARU Supplier CSR Guidelines and SUBARU Green Procurement Guidelines to our business partners and asked them to familiarize themselves with and comply with our basic environmental policies. We also held internal study groups on decarbonization for Purchasing Division staff to familiarize them with SUBARU's environmental policies.

Green Procurement Guidelines

The SUBARU environmental policies state that “Our purchasing activities reflect consideration for biodiversity and other aspects of environmental protection.” Accordingly, 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 with these guidelines is considered a necessary criterion for selecting business partners, and we request that they establish an environmental management system based on acquisition of third-party ISO 14001^*1 certification. We recommend new business partners to acquire ISO 14001 certification. For those facing difficulty acquiring ISO 14001, we review their compliance status by having them submit voluntary assessment reports based on our EMS.
Currently, all Tier 1^*2 business partners have ISO 14001 certification or equivalent environmental management systems in place. 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.

*1

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.

*2

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.

*3

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.

SUBARU Green Procurement GuidelinesPDF/619KB
Green Procurement Guidelines Aerospace Company Edition^*3PDF/532KB

Climate Change Initiatives

With the aim of decarbonizing our supply chain, we continued to ask our business partners to report their total CO₂ emissions in FYE March 2024, and received responses from 289 companies, making it possible to visualize the total CO₂ emissions of each business partner and the change in CO₂ emissions. We also conducted on-site interviews with some of our business partners to understand the status of their specific initiatives, share information on issues they face, and reconfirm SUBARU’s commitment to working together with them to address their requests.

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^*1 and ELV Directive^*2. 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.

*1

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.

*2

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 reduce the generation of waste by encouraging the reuse and recycling of end-of-life 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 2024, we conducted due diligence through interviews with one rubber part manufacturer.
SUBARU also uses copy paper made from 100% recycled paper pulp that is not from new plant resources.

Communication with Suppliers

In our Automotive Business, we host online Policy Briefings every spring to share policies on development, quality, procurement, and production with our business partners. At subsequent events with business partners, we hold face-to-face meetings to update information and listen to unfiltered opinions from them, which leads to improvements in our initiatives.

During FYE March 2024, the Aerospace Company held the SUBARU Status Report Meeting for our business partners in May and November, and a New Year’s business briefing for 305 business partners in January.
During FYE March 2025, we held the SUBARU Aerospace Company Overview Briefing in May. An SUBARU Aerospace Company Partner Conference is scheduled for October, and we will continue our activities to deepen cooperation with our business partners.