Social
Procurement

The Bridgestone Group’s sustainable procurement initiatives create long-term environmental, social and economic benefits for stakeholders across its supply chain. This work is grounded in its Global Sustainable Procurement Policy and aligns with the Group’s goal of using 100% sustainable materials* by 2050 and beyond. The policy helps identify and evaluate qualified suppliers, promote best practices, and serve as a communication and improvement tool for the industry.

The Group’s sustainable procurement mission is important as customers and consumers are ever more interested in the natural rubber supply chain, including issues related to human rights and environmental practices of the rubber the Group sources.

The policy was formulated paying close attention to international norms and fundamental principles for human rights reflected in a wide range of recognized commitments, including the United Nations Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, various International Labour Organization conventions, ISO 26000 and 20400 standards on sustainable procurement and social responsibility.

In the policy, the Group has identified five key human rights issues for its business: child labor, forced labor, land rights, labor and working conditions, and fair and equal treatment, and has made a commitment to engage with stakeholders in identifying these issues in the future. Working with suppliers, the goal is to contribute to the faster realization of a sustainable supply chain for the environment and communities around the world.

*The Group defines sustainable materials as materials "1) that come from resources with a continual supply, 2) that can be used as part of our business over the long-term, and 3) that have a low environmental and social impact over the lifecycle from procurement to disposal." For details on sustainable materials, see “Long-term environmental vision (2050 and beyond): Towards 100% sustainable materials.”

Global Sustainable Procurement Policy (11 languages)

In September 2021, the Group revised its Global Sustainable Procurement Policy to respond to stakeholders’ expectations of contributing toward a carbon-neutral state by 2050 and beyond considering the Policy Framework of the Global Platform for Sustainable Natural Rubber (GPSNR). This revision mirrors the Group’s December 2020 update to its long-term environmental target of achieving a carbon-neutral state by 2050 and beyond, along with its target of reducing total CO₂ emissions by 50%^*1 by 2030. The revised policy also includes new requirements for the enhancement of environmentally responsible procurement and respect for human rights. Conflict minerals also were addressed in the revised policy.

1. Base year: 2011

Composed of cross-functional members including senior management procurement/sustainability leaders from around the world, the Sustainable Procurement Working Group formulates and deploys the Group’s Global Sustainable Procurement Policy and related plans. It also confirms the progress of global initiatives and activities that are then reported to the Global Sustainable Committee (GSC) and Global Executive Committee (EXCO). The Global EXCO includes the Global CEO in its membership and is the highest-level committee overseeing the Group’s business strategy and execution.

At the end of 2022, the Sustainable Procurement Committee was established to maximize contributions toward creating social and customer value based on the “Bridgestone E8 Commitment.”

Since the introduction of the Global Sustainable Procurement Policy, the Group has been aggressively training hundreds of procurement, legal, technical and customer-facing teams, among others across the enterprise.

The Group defines our suppliers according to the size and frequency of our purchases, as shown in the table below, and promotes initiatives in accordance with these definitions. Of the Level 1 suppliers in the table below, the majority provide raw materials for tire products. The main raw materials are natural rubber, synthetic rubber, steel cord and rubber chemicals. The Group has businesses with approximately 1,000 Level 1 and 2 tire material suppliers globally.

Supplier definition

1. The status that suppliers have met our Minimum Requirements and have implemented Preferred Practices that are stated in the Global Sustainable Procurement Policy.
2. The status that suppliers have the ability to clearly know and verify where their raw materials and products are sourced from, how they are produced, who is involved, as well as the impact that the sourcing of these raw materials or products has on all involved in the supply chain.

Policy Rollout:

The policy is distributed to all suppliers. All Level 1 and 2 suppliers of the Group are required to sign a policy receipt acknowledgement. Since the first edition published in 2018, acknowledgement rate of the policy has been confirmed by more than 99% of the Group’s Level 1 and 2 suppliers. As to version 2.0, which was revised in 2021, the Group established the goal and KPI as “100% of Tier 1* suppliers will have acknowledged the revised Global Sustainable Procurement Policy by the end of 2023.” (As of March 31, 2023, 87% of Tier 1 tire material suppliers had done so.)

For several years, the Group has held annual conferences for suppliers to ensure full understanding of its Sustainable Procurement Policy in multiple regions in which it operates. During these annual conferences, the Group has communicated with suppliers on the four foundational elements of the policy, which are Transparency, Compliance, QCD & Innovation, and Sustainable Procurement Practices such as environmentally responsible practices and respect for human rights. In 2022, 370 suppliers, consisting primarily of important suppliers for the Group’s global business and its business in Japan, were invited to the annual online conference in Japan. Approximately 610 suppliers were invited to the annual supplier conferences globally.

The Group’s policy deployment activities for suppliers have been evaluated by EcoVadis and we were awarded a score of 80 in Sustainable Procurement (overall score of 68).

* Suppliers that supply materials directly to the Group.

The Group rates suppliers on sustainability, which includes engagement on human rights issues, through EcoVadis. The Group monitors their EcoVadis scores and reports them internally on a regular basis. Working together with suppliers, the Group promotes sustainable procurement and competitiveness based on the Sustainable Procurement Policy.

To better understand supplier strengths and vulnerabilities, the Group worked with EcoVadis to conduct enhanced environmental, social and governance (ESG) risk assessments of the Group's new and existing major, Tier 1 tire material suppliers. Consistent with the Sustainable Procurement Policy, the ESG issues assessed include energy consumption, water, biodiversity, pollution, waste, customer safety, industrial safety, labor practices, human rights, corruption, bribery, fraud, money laundering, and sustainable procurement.

The Group established the following goals and KPIs in terms of EcoVadis assessment:

1. 95% or more of the Group’s spend-basis Tier 1 tire material suppliers will have completed an EcoVadis enhanced ESG risk assessment by the end of 2023. (As of March 31, 2023, 97% had done so.)
2. All of natural rubber Tier 1 suppliers will have completed an EcoVadis enhanced ESG risk assessment by the end of 2023. (As of March 31, 2023, 94% had done so.)

As of March 31, 2023, 73% of the Group’s Level 1 and 2 tire material suppliers have completed the third-party assessment with EcoVadis. Of suppliers who were reviewed, 74% scored an overall average of 45 or higher, which indicates a commitment to Sustainable Procurement Practices.

The Group uses third-party assessments to quantify suppliers’ environmental and social performance and governance and promote improvements by advising and supporting its suppliers on required solutions.

The Group conducts sustainable procurement seminars in all business regions for certain suppliers based on the Sustainable Procurement Policy and the results of their ESG risk assessments, to help support their efforts to improve ESG activities.

* Based on self declaration by Tier 1 suppliers.

Collaboration with WWF Japan

In 2020, the Sustainable Procurement Working Group initiated work with WWF Japan to study and develop a due diligence process for ensuring the company’s supply chain is in compliance with its Global Sustainable Procurement Policy, especially in upholding human rights and safeguarding environment. The collaboration aims to strengthen sustainable rubber production and help build the capacity of smallholders.

Also in 2021, the Group has started to enhance its ESG due diligence for natural rubber supply chain, for which risk management is seen as most critical by external stakeholders. In order to identify and assess ESG risks in its natural rubber supply chain, the Group has utilized assessments by Verisk Maplecroft and EcoVadis for prioritizing targeted suppliers based on Verisk Maplecroft and EcoVadis scores and conducted on-site ESG audits of those suppliers using a self-assessment questionnaire developed in collaboration with WWF Japan.

In addition, in 2022 the Group accelerated its ESG due diligence activities according to the Due Diligence Process, which the Group’s Sustainable Procurement Working Group established to assess sustainability risks against the GPSNR’s Policy Framework, which covers issues including child labor, forced labor and deforestation risks, among other industry specific risks, in cooperation with WWF Japan. The Group achieved the target of conducting on-site ESG audits of 21 natural rubber processing facilities and nine natural rubber plantations by the end of 2022. The Group will conduct on-site ESG audits of 33 natural rubber processing facilities in 2023.

Although no specific risks have been identified in the most recent audit, including risks related to human rights violation and deforestation, if a risk is identified by the audits, the Group will continuously support and develop a plan to prevent/mitigate the risk together with suppliers to reduce risks throughout its natural rubber supply chain.

In terms of ESG risks in the above risk assessment, the Group focuses on those risks that are identified and upheld in the GPSNR’s Policy Framework. The most vulnerable groups in the natural rubber supply chain are the smallholders, due to their economic instability and power balance with other players in the entire supply chain; therefore the Group has worked on the terminology of the self-assessment questionnaire in order to better check the sustainable risk situation of smallholders.

Nearly all of the world’s natural rubber is derived from Hevea brasiliensis, a type of rubber tree found primarily in the rain forests of West Africa, South America and Southeast Asia. These forests risk depletion, so to offset its footprint in these regions, the Group provides Hevea rubber trees to smallholders. The Group also provides these smallholders with technical training and productivity-improvement techniques developed on its own rubber farms, reaching out to a total of 2,000 smallholder farmers. Since 2005, the Group has provided more than 5 million saplings to farmers in Liberia and Indonesia, with the budded stumps valued at over 2.2 million USD. In addition, the Group has supported dozens of budwood gardens to improve clonal varieties used in replanting in Liberia, while also using genome data to improve breeding technologies and growing methods to make rubber trees more resilient and productive.

Demand for natural rubber has steady increased globally over the years, while farmland expansion is becoming increasingly restricted because of the need to protect forests, whether voluntarily or in accordance with law. Moreover, poor yields will affect the livelihood of smallholders, making it unsustainable for them to continue cultivating natural rubber, and could result in them switching to farming other crops. In fact, natural rubber used in tire production is one of the most sustainable raw materials, so it is important for the Group to make efforts to strengthen the capacity of natural rubber smallholders, increasing yields and income, preventing them from causing deforestation and other ESG risks.

In 2022, the Group formed the Capacity Building Task Force, bringing together relevant functions under its Sustainable Procurement Working Group to strengthen capacity building initiatives as a Group. The task force is in the process of setting effective and clear KPIs and medium-term goals aligned with the Group’s strategy and GPSNR standards.

GPSNR, a truly multi-stakeholder and inclusive network, serves as an effective platform for collaboration, sharing resources and knowledge, and uniting the Group’s efforts in enhancing sustainability of the natural rubber industry with those of other tire makers, automakers, smallholders, processors and producers, and civil society in tackling this vast and complicated issue.

Bridgestone’s Sustainable Procurement Working Group donated 60, 000 USD to GPSNR to support initiatives led by GPSNR for smallholder capacity building to be conducted in 2023 and was recognized by GPSNR as an important donor.

In addition to providing donation to GPSNR’s capacity building projects, the Group is a member of GPSNR’s Capacity Building Working Group and actively participates in the Smallholders Working Group with the aim of providing effective support for and promoting smallholders’ voices in GPSNR. To provide support for enhancing smallholders’ capacity (increasing yield per hectare in a sustainable manner), the Group is actively involved in the discussion around GPSNR’s Shared Responsibility Framework, discussing the ways in which to build the most equitable financial distribution mechanism, to share resources and knowledge, and to recognize and award members’ efforts in enhancing natural rubber’s sustainability.

Moreover, prior to the COVID-19 pandemic, Bridgestone Singapore Pte., Ltd. (BSSG) visited more than 100 approved natural rubber factories to hold capacity building workshops on improving quality and enhancing traceability and sustainability. BSSG also revisited suppliers with low EcoVadis scores to provide further assistance. In 2020, the company shifted to online meetings with suppliers due to the pandemic. This allowed BSSG to continue working on enhancing traceability and sustainability in the natural rubber supply chain.

In Southeast Asia, where over 90% of the world’s rubber tree plantations are concentrated, white root rot disease is worsening, killing trees by infecting and rotting their roots. It can be difficult to detect, especially in the early stages when treatment is more successful. The Group has developed techniques to diagnose the disease early using drone photography and artificial intelligence (AI) image analysis.

For more information, see “Enhancing contribution.”

Being respectful of local rubber farmers and smallholders is critical to the Group’s commitment to helping protect the environment while creating value for the communities where it operates. These efforts help protect the people and places the Group relies on.

On its farms, the Group ensures access to safe and clean water; provides free medical care; operates 23 schools from kindergarten to 12th grade and employs more than 300 teachers and school administration personnel; and has introduced renewable energy sources for sustainable and affordable access to lighting and energy.

To help independent smallholder farmers, the Group hosts Seeding Success to Smallholders workshops in Southeast Asia, providing technical training and productivity improvement techniques developed on its own farms. Every year, hundreds of smallholders participated in sessions to learn techniques such as how to grow quality rubber trees, replanting trees, preventing disease and best practices for tapping trees.

The Group set the goal and KPI of establishing the Group’s grievance mechanism for natural rubber supply chain in 2022, to solve social and environmental issues in cooperation with the direct suppliers and a third party adviser and to disclose the status of each grievance quarterly.

In February 2022, the Group launched a grievance mechanism for the natural rubber supply chain in partnership with a third party , Earthworm Foundation. The grievance mechanism covers human rights issues and guarantees confidentiality and anonymity. It is available and accessible to all internal and external stakeholders in Bridgestone’s natural rubber supply chain and aids in resolving issues through cooperation with direct suppliers and third parties involved, in accordance with the Global Sustainable Procurement Policy. As necessary, the Group will coordinate with the grievance mechanism of the Global Platform for Sustainable Natural Rubber (GPSNR). To ensure transparency, the Group is disclosing the standard operating procedure, grievance windows, and the status of each grievance on the Group global website below.

For more information, see “Grievance Mechanism.”

The Group’s Sustainable Procurement Policy covers all materials, including conflict minerals (tin, tungsten, tantalum and gold) and cobalt extracted in conflict areas such as the Democratic Republic of the Congo (DRC) and adjoining countries. The Group conducts risk assessments across its supply chain using the reporting templates compiled by the Responsible Minerals Initiative (RMI) alliance consisting of over 400 global corporations and organizations. Bridgestone Group suppliers whose products potentially contain conflict minerals are required to complete and submit the reporting templates annually.

Additionally, the Group has traced 100% of the smelters from which it sources tire-product materials globally. All are compliant with the Responsible Minerals Assurance Process (RMAP), which is certified by RMI. If smelters are suspected or confirmed of non-compliance with the relevant RMAP, suppliers are required to make their best efforts to identify and deploy actions for alternative sourcing or mineral substitution.