Supply Chain Management

The artience Group (hereinafter “the Group”) is contributing to society by offering outstanding products and services to customers, while working to build honest relationships through fair and equitable procurement activities with our suppliers who work with us to build supply chains. With a view to ideal form of supply chains built by the Group and its suppliers in order to contribute to the sustainable development of society and the global environment, the Group established the “Basic Policy on Procurement” (hereinafter “the Basic Policy”), and will conduct procurement activities such as purchasing and outsourcing.

1. Compliance with laws and international norms
   The Group will comply with the laws and regulations of the countries and regions in which we conduct procurement activities, and respect and comply with international codes of conduct as well as societal norms in those countries and regions In particular, we will respond to the demands of society, such as by strengthening our response to human rights issues, including those in our supply chain, as provided for under the “UK Modern Slavery Act 2015,” “California Transparency in Supply Chains Act,” “OECD Guidelines for Multinational Enterprises,” and “OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict and High-Risk Areas.”
2. Human rights and labor considerations
   The Group will strive to build supply chains in which the human rights of all workers involved are respected and their labor rights and appropriate employment and working environment ensured, so as to eliminate inhumane treatment such as child labor and forced labor, discrimination, harassment, and potential involvement in human rights abuses including procurement of conflict minerals. Furthermore, we will demonstrate consideration for the right to life and the right to live of indigenous peoples and local residents in the areas in which we conduct business operations.
3. Responsibility for the global environment and resources
   In addition to complying with environmental laws and regulations, the Group will strive to voluntarily reduce our environmental impact and our use of resources in order to contribute to the preservation of the global environment and the development of a recycling-oriented society through our procurement activities. We will maintain a particular focus on reducing energy consumption and greenhouse gas emissions across our entire supply chain. As a manufacturer of chemicals, we will also ensure that chemical substance control is implemented both for raw materials and the manufacturing process.
4. Fair business practices
   In order to gain the trust of all stakeholders, the Group will conduct our procurement activities based on corporate ethics and responsible business practices and in accordance with all applicable laws. We will prohibit corruption acts such as bribery, the sharing or receiving of illegal gains, the obstruction of fair and open competition, and the infringement of intellectual property rights, as well as strive for appropriate information disclosure so as to ensure confidentiality, accountability, and transparency.
5. Dissemination of the policy and education
   The Group will work to maintain and sustain a sustainable supply chain through appropriate training and education activities relating to human rights, labor issues, and the environment, etc., and by making this Basic Policy and Sustainable Supply Chain Guidelines known to all Group employees and all other persons involved in the supply chain.
6. Selection of suppliers
   Suppliers are our partners when it comes to achieving our vision for a sustainable supply chain through our procurement activities. The Group will select like-minded suppliers who seek to improve the sustainability of the global environment and society based on fair and equitable criteria, comprehensively and rationally taking into account their capabilities and reliability in terms of factors such as legal compliance, quality, price, supply capacity, technological capability, and ability to provide information. To maintain a sustainable supply chain, we will also conduct appropriate surveys and audits of our suppliers and work toward continuous improvement.
   To achieve the objectives of this paragraph, we will apply the following criteria in the selection of new suppliers and periodic checks of the status of existing suppliers.
   

   Standard for Selecting Suppliers

   1. Legal compliance
      The supplier must always comply with laws and regulations, and respect international codes of conduct. In particular, the supplier must conduct corporate activities in good faith for all supply chain stakeholders, with due consideration to human rights and labor practices.
   2. Quality
      The supplier must maintain stable quality using a quality control system that adequately meets the Group’s quality requirements.
   3. Price
      The supplier must offer prices that are appropriate and economically rational. The price of raw materials must be at a level that allows the Group to compete on price in the market.
   4. Supply capacity
      The supplier must satisfy our desired volume and delivery terms and ensure a stable supply.
   5. Technological capabilities
      The supplier must possess the technological capabilities necessary to support the monozukuri (manufacturing excellence) goals of the Group.
   6. Ability to provide information
      The supplier must be able to provide necessary or relevant information and proposals to the Group in a timely and appropriate manner.
   7. Confidentiality
      The supplier must be able to maintain the confidentiality of information obtained in the course of transacting business with the Group using an appropriate information control and security system.
   8. Environmental-friendly
      The supplier must strive to reduce energy consumption and greenhouse gas emissions in the supply chain, demonstrating adequate consideration for global environmental protection, the preservation of resources and biodiversity.
   9. Management base
      The supplier must practice sound and sustainable business management based on a resilient business foundation.
   10. CSR management
       The supplier must practice corporate social responsibility in business activities in conformance with the Basic Policy and the Sustainable Supply Chain Guidelines, or in compliance with business practices at an equivalent level.
7. Revision, abolition and management
   Decisions regarding the revision or abolition of this Basic Policy shall be made by the Board of Directors of artience Co., Ltd.
   The department in charge of the revision and abolition of this Basic Policy shall be the department that oversees the procurement activities of artience Co., Ltd.

Established on April 2005
Revised on January 1, 2024 (Resolved at Board of Directors on December 8, 2023)