Supply Chain Management

Management approach

Policy and approach

Amid accelerating globalization and the growing scope of social issues to be addressed, corporate social responsibility now demands greater engagement in CSR activities and risk management, with “contribution to the building and development of a sustainable society” seen as a core responsibility of business.

In this context, Toyobo Group recognizes that promoting procurement activities that place greater emphasis than ever on CSR factors—such as the natural environment, labor conditions, and human rights—is essential, in addition to conventional considerations like quality, performance, price, and delivery terms, when sourcing products, materials, and raw materials.

Toyobo Group contributes to the achievement of the SDGs and the development of a sustainable society across the entire supply chain by establishing fair trading policies and conducting responsible procurement and logistics.

Based on Principle 2: “Fair business practices” of the TOYOBO Group Charter of Corporate Behavior, we ensure fair competition and transactions, responsible procurement and logistics, and maintain sound relationships with society and stakeholders, including customers and business partners.

We have established CSR Procurement Guidelines to address matters such as legal compliance, fair trade, environmental responsibility, and respect for human rights (including the prohibition of child labor, forced labor, and discrimination against people of any attributes, including LGBTQ+), as well as Green Procurement Guidelines for environmental considerations. Most recently, we revised the CSR Procurement Guidelines in January 2026 considering emerging global challenges.

CSR procurement

We have formulated our CSR Procurement Guidelines and Green Procurement Guidelines with the aim of fulfilling our social responsibilities, such as ensuring legal compliance, product quality and safety and respect for human rights, and enhancing value throughout our entire supply chain through initiatives such as contributing to regional communities and environmental conservation. For new suppliers, we request that they submit a Consent Confirmation Form stating that they agree to the Guidelines. In addition to sharing these guidelines through our website, we carry out CSR procurement surveys for business partners requesting their understanding and cooperation in actively advancing initiatives.

• CSR Procurement Guidelines
• Green Procurement Guidelines

Targets and indicators

< Targets >

・Throughout its supply chain, Toyobo group aims to achieve procurement and logistics practices that involve fair and sincere transactions, respect human rights, are environmentally friendly, and consider impact on both society and the environment.

・We will reduce CO₂ emissions by promoting green logistics, such as implementing a modal shift to rail and sea transportation and improving loading efficiency.

< Indicators and results >

• CO₂ emissions per unit of transportation (in g-CO₂/t-km) represents the number of grams (g) of CO₂ emitted per tonne of goods transported over one kilometer.

Initiatives

Fairness and transparency in trade

We take a rigorous approach to ensuring fairness and transparency, based on sound trading. We do not give or accept gifts or entertainment in order to secure unjust profit or preferential treatment from our business partners, and we have established a prior consent system to strengthen our checking system to ensure that actions that go beyond what is deemed socially acceptable do not occur.

Toyobo Group CSR procurement seminar

In November 2025, the Toyobo Group held a CSR procurement seminar for its major suppliers worldwide (approximately 360 companies). As part of efforts to promote social responsibility initiatives together with suppliers, the briefing was conducted as part of supplier training to deepen understanding of the Group’s sustainability initiatives, including carbon neutrality, respect for human rights, resource circulation, the CSR Procurement Guidelines, the Declaration of Partnership Building, and responses under the whistleblower system. The Group requested compliance with the Toyobo Group CSR Procurement Guidelines and expressed its intention to contribute to the development of a sustainable society across the supply chain in collaboration with its business partners.

CSR procurement survey

Implementation of the CSR procurement survey and risk assessments

Our company communicates our CSR Procurement Guidelines to major business partners worldwide and conducts risk assessments concerning information security and social issues that include the environment, safety, human rights, labor, and compliance (including the prevention of graft, bribery, fraud, money laundering, and other corruption). These risk assessments involve questionnaire surveys distributed to our major business partners worldwide, aligning with our CSR Procurement Guidelines. Based on the self-assessments received from these questionnaires, we initiate improvement activities aimed at mitigating societal and environmental impacts and reducing risks. Collaborating closely with both suppliers and buyers, we work to advance CSR procurement practices that promote the sustainability of society.

We conduct annual surveys and follow-up dialogues with our business partners, completing a supplier engagement cycle every two years. The most recent survey was conducted in fiscal 2026.

Engagement with new and existing business partners

We regularly ask existing business partners to cooperate with our questionnaires and then perform risk assessments. In addition, for new business partners, we conduct a risk assessment through a preliminary CSR survey prior to the start of transactions as part of the due diligence process to determine whether to establish a business relationship.

Results obtained in CSR procurement surveys in FY2026

Through these surveys, we evaluate suppliers’ risk related to social issues. We collaborate with suppliers to address identified issues from the risk assessment and aim to elevate CSR across the entire supply chain. When engaging new suppliers, we request their participation in surveys, and we engage existing suppliers in ongoing survey collaboration. If CSR procurement surveys reveal issues, we implement corrective measures.

1. Survey overview

● Aggregation scope and no. of suppliers covered: 363 suppliers representing 90% of overall transaction volume

● Breakdown of Suppliers

● Survey content
Adopted the Nikkei Sustainable Link questionnaire developed by Nikkei Research Inc., which incorporates international guidelines and external expert insights and covers areas including human rights, labor, the environment, and fair business practices

● Survey categories
Sustainability management, environment, human rights and labor, fair business practices, supply chain management, and access to remedy.

2. Aggregated results

The response rate was 99%.

3. Evaluation results

Risk assessments based on the questionnaire results are conducted using the Company’s own criteria to evaluate responses submitted through Nikkei Sustainable Link. For suppliers previously assessed as Rank D, the Company requested improvement initiatives in fiscal 2025 as part of its engagement activities. As a result, progress was made in human rights-related measures, and many suppliers improved to Rank C or higher. On the other hand, some suppliers were newly assessed as Rank D due to revisions to assessment items following changes in the questionnaire and shifts in the transaction mix.

4. Future Actions

For certain suppliers that received low scores in human rights-related items in the questionnaire conducted in fiscal 2024, the Company carried out on-site interviews in fiscal 2025.
During the on-site interviews, discussions were held on human rights due diligence, environmental initiatives, and anti-corruption measures in an effort to understand actual conditions and resolve issues. As a result, the Company confirmed that there were no serious human rights violations such as child labor or forced labor, and no significant environmental issues or compliance violations.
Based on the questionnaire conducted in fiscal 2026, suppliers assessed as Rank D will be asked to undertake improvement initiatives during fiscal 2027, and engagement activities will be conducted to promote understanding of and agreement with the CSR Procurement Guidelines and human rights initiatives. In addition, these suppliers will be designated as priority follow-up suppliers. As in fiscal 2025, the Company will consider conducting on-site interviews with certain suppliers and continue providing support for ongoing improvements.

Green procurement

In order to contribute to the creation of a sustainable society, we carry out procurement from suppliers who actively work to conserve the environment and procure materials that have low environmental impact on a priority basis. Additionally, we have formulated Green Procurement Guidelines with the aim of promoting environmentally friendly procurement. We ask our business partners to understand our green procurement approach and provide the following information regarding chemical content.

(1) That the material does not contain any of the prohibited substances specified by Toyobo.

(2) That the content of hazardous substances specified by Toyobo has been identified.

In fiscal 2026, we revised our Chemical Content Information Sheet, which uses the chemSHERPA^® information-sharing scheme, to reflect amendments to laws and regulations, and surveyed our suppliers using the revised sheet. For general purchased goods, we are promoting green purchasing with the use of environmental labels.

• "chemSHERPA^®" is a registered trademark of the Japan Environmental Management Association for Industry (JEMAI).

• Green Procurement Guidelines

Educational activities for sustainable procurement

We conduct training once a year for all personnel in charge of procurement and logistics (100%) to ensure that they are thoroughly familiar with our CSR Procurement Guidelines.

In fiscal 2026, training was provided from October to November to all procurement and logistics personnel of Toyobo and TOYOBO MC Corporation (100%, 83 employees).
We incorporate goals related to “contribution to sustainable procurement (stable procurement)” into the personnel performance evaluations of procurement and logistics staff, and manage their progress as part of their guidance and training. We also solicit improvement proposals related to sustainable procurement activities and award outstanding suggestions.

Addressing conflict minerals

In our CSR Procurement Guidelines, Toyobo Group calls for the promotion of responsible procurement with respect to regulations on conflict minerals.

Using Specified Chemical Substances Data Sheets, we investigate whether conflict minerals (tin, tantalum, tungsten, gold, mica, cobalt, copper, graphite, lithium, and nickel) are used in our raw materials.

In FY2026, we conducted investigations into the presence of conflict minerals in our raw materials. There were no responses indicating the use of raw materials from conflict areas. We also prepared an internal survey and response system to enable us to provide prompt and appropriate responses to survey requests from customers regarding conflict minerals.

Resolving social issues in logistics

To resolve social issues in logistics, we are pushing forward with initiatives to reduce environmental impact and realize sustainable logistics. To reduce our environmental impacts, we are working to shorten transport distances by utilizing the ports closest to our business sites, to shift freight transportation to maritime and rail modes, and to enhance loading efficiency through vehicle allocation simulations using logistics systems.

In 2019, we submitted a voluntary action declaration in support of the “White Logistics Movement”* advocated by Japan’s Ministry of Land, Infrastructure, Transport and Tourism, Ministry of Economy, Trade and Industry and Ministry of Agriculture, Forestry and Fisheries.
Starting in 2023, we joined the Chemicals Working Group, a subcommittee of the Physical Internet Realization Conference promoted by Japan’s Ministry of Land, Infrastructure, Transport and Tourism and Ministry of Economy, Trade and Industry. Through this group, we developed a voluntary action plan to respond to amendments to two logistics-related laws.
The main objectives include reducing waiting and handling times (within two hours per operation) and promoting palletization, aiming to alleviate driver burdens and enhance logistics efficiency.

Examples of our company’s responses to logistics-related legislative amendments

Response to natural disasters, etc.

In recent years, various areas have experienced significant damage from earthquakes, typhoons, and sudden localized rainstorms. We have gained knowledge in the process of responding to these events, and aim to realize even more stable procurement and logistics.

As part of our Business Continuity Plan (BCP), we strive to identify and manage risks throughout the supply chain. For procurement, we are looking to procure raw materials from multiple regions, and for logistics, we are establishing alternative transportation means and routes in collaboration with logistics operators.

Participation in initiatives

In January 2020, we joined the "Global Compact Network Japan", and since FY2022, through participation in its supply chain subcommittee, we have been gathering information and applying it to our daily activities.

Declaration of partnership building

In October 2020, we agreed with the aims of the Council on Promoting Partnership Building for Cultivating the Future promoted by the Cabinet Office and the Small and Medium Enterprise Agency, and announced our "Declaration of Partnership Building".

In this declaration, we expressed our commitment to contribute to solving social and environmental issues throughout our supply chain. Based on the declaration, we will endeavor to add value with our entire supply chain.

In 2026, reflecting revisions to the Promotion Standards under the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises, the content was updated to support the realization of mutual prosperity across the entire supply chain.

Response to whistleblower protection system

We have established a consultation and contact point for business partners on our website.

It receives reports and inquiries concerning actual or suspected violations of laws, regulations, or corporate ethics. In compliance with the Privacy Policy, we have established a system to prevent any disadvantage to the persons consulting with us as a result of consultation or reporting.

Main items for consultation

1. 1.Violations or suspected violations of laws and regulations, and corporate ethics, etc.
2. 2.Acts violating respect for human rights
3. 3.Acts violating our CSR Procurement Guidelines

• Receiving reports from business partners (Japanese only)