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 (UN) Universal Declaration of Human Rights, the UN Guiding Principles on Business and Human Rights, various International Labour Organization conventions, as well as ISO 26000 and 20400 standards on sustainable procurement and social responsibility.

Under this 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. The Group has made a commitment to engage with stakeholders in identifying these issues in the future. Working with suppliers, the goal is to contribute to 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)

The Group updates its Global Sustainable Procurement Policy, taking into account changes in the external environment and expectations and requests from society and stakeholders.

Version 3.0 (January 2024) explicitly stated that Tier 1 suppliers are required to extend/share the policies with their own suppliers, with the aim of reaching the entire supply chain. Additionally, the content of the policy was expanded to address social demands such as environmental and human rights issues.

The Group requests its suppliers to fully understand and implement the policy. The Group is committed to promoting sustainable procurement activities and striving to meet social demands. It aims to continuously improve and evolve, building better business partnerships in the future.

Composed of cross-functional members including senior management procurement/sustainability leaders from around the world, until 2024 the Sustainable Procurement Working Group played the central role in formulating and deploying the Group’s Global Sustainable Procurement Policy and related plans. To further promote sustainable procurement activities and strengthen implementation, in 2024 these responsibilities were transferred from the Sustainable Procurement Working Group to the Global Procurement Committee composed of procurement leaders from each regional strategic business unit (SBU). Related topics are also discussed in a number of thematic Task Forces, in collaboration with related functions. The Global Procurement Committee also confirms the progress of global initiatives and activities that are then reported to the 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.

Since the introduction of the Global Sustainable Procurement Policy, the Group has been proactively training hundreds of procurement, legal, technical and customer-facing teammates, 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 business dealings with approximately 1,000 Level 1 and 2 tire material suppliers globally.

Supplier definition

1. The status that confirms suppliers have met our Minimum Requirements and have implemented the Preferred Practices that are stated in the Global Sustainable Procurement Policy.
2. The status that confirms suppliers have the ability to clearly identify 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 of the policy has been confirmed by more than 99% of the Group’s Level 1 and 2 suppliers. As to version 2.0, a revision that was implemented in 2021, the Group established the goal and KPI of “100% of Tier 1^* suppliers will have acknowledged the revised Global Sustainable Procurement Policy.” (As of March 31, 2024, 87% of Tier 1 tire material suppliers had done so.)

For several years, the Group has held annual conferences for suppliers in multiple regions in which it operates to ensure full understanding of its Global Sustainable Procurement Policy. 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 2023, 280 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 380 suppliers were invited to the annual supplier conferences globally in 2023.

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 69) in October 2023.

* Suppliers that supply tire 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 Global 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 Global 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 the 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. (As of March 31, 2024, 97% had done so.)
2. All natural rubber Tier 1 suppliers will have completed an EcoVadis enhanced ESG risk assessment. (As of March 31, 2024, 94% had done so.)

As of March 31, 2024, 74% of the Group’s Level 1 and 2 tire material suppliers had completed the third-party assessment with EcoVadis. Of suppliers who were assessed, 81% scored an overall average of 45 or higher, which indicates a commitment to Sustainable Procurement Practices.

The Group uses third-party assessments as described in the preceding section 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. These seminars are designed to help support suppliers' efforts to improve ESG activities.

* Based on self declaration by Tier 1 suppliers

Collaboration with WWF Japan

In 2020, the Group initiated work with World Wildlife Fund (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 the environment. The collaboration aims to strengthen sustainable rubber production and help build the capacity of smallholders.

Also in 2021, the Group started to enhance its ESG due diligence for the natural rubber supply chain, for which risk management is seen as most critical by external stakeholders. To identify and assess ESG risks in its natural rubber supply chain, the Group has utilized third-party assessments by Verisk Maplecroft and EcoVadis for prioritizing targeted suppliers based on Verisk Maplecroft and EcoVadis scores. They conducted on-site ESG audits of those suppliers using a self-assessment questionnaire developed in collaboration with WWF Japan. This self-assessment questionnaire is aligned with Global Platform for Sustainable Natural Rubber (GPSNR) criteria.

In addition, in 2022, the Group accelerated its ESG due diligence activities in accordance with the Due Diligence Process. The Group’s Sustainable Procurement Working Group established this process 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 its target of conducting a total of 54 on-site ESG audits of our Tier 1 natural rubber processing facilities by the end of 2023.

In the on-site ESG audits of those suppliers in 2023, no human rights or significant environmental impacts were identified. However, there is room for improvement, such as in ways to collect information on the supply chain and endangered species. Therefore, the Group will continuously offer support and develop a prevention/mitigation plan with suppliers to reduce risks and monitor their implementation status throughout the 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 the power imbalance 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.

Demand for natural rubber has steadily increased globally over the years, while farmland expansion is becoming more 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. Natural rubber is one of the renewable materials used in tire production and it is important for the Group to make efforts to strengthen the capacity of natural rubber smallholders, increase yields and income, and prevent them from causing deforestation and other ESG risks.

In 2022, the Group formed the Capacity Building Task Force, bringing together relevant functions to strengthen capacity building initiatives for smallholders. In 2023, the Group provided trainings and technical support to smallholders, reaching 5,640 smallholders. In order to accelerate corporate initiatives, the task force has established a global strategy with a medium-term goal, which is to provide support for 12,000 smallholders toward forest conservation by 2026. This goal is in line with Group’s strategy and GPSNR standards.

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 are at risk of 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. Since 2005, the Group has provided more than five million saplings to farmers in Liberia and Indonesia, with the budded stumps valued at over US $2.2 million. 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.

The Global Platform for Sustainable Natural Rubber (GPSNR) is a truly multi-stakeholder and inclusive network, and serves as an effective platform for collaboration, sharing resources and knowledge, and uniting the Group’s efforts in enhancing the 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.

The Group donated US$60, 000 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. With the donation, GPSNR organized a series of agroforestry and income diversification projects, involving a series of agroforestry workshops and training for smallholders in Indonesia, Liberia and the Ivory Coast, with the participation of a total of 99 smallholders between 2023-May 2024.

In addition to providing the donation to GPSNR’s capacity building projects, the Group is a member of GPSNR’s Smallholder Representation and Capacity Building Working Group, aiming to provide effective support for and promote 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 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.

The following are the major components covered in 2023:

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 communities 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 250 teachers and school administration personnel, and has introduced renewable energy sources for sustainable access to lighting and energy in 39 communities.

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 participate 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 believes it is fundamental to work with our trusted partners as a team throughout our value chain and co-create value towards society. Especially in the natural rubber industry, which tends to be exposed to the risks of deforestation and child & forced labor, a grievance mechanism is an effective tool that allows us to collect voices of stakeholders around our operation; helps us to engage with our suppliers; and enables us to understand where our potential risks and opportunities are, to improve sustainability practices across our value-chain. We have therefore set up a grievance mechanism for the natural rubber supply chain in 2022, which covers human rights issues and environmental issues and guarantees confidentiality and anonymity of grievance raisers as needed. It is available and accessible to all internal and external stakeholders in group’s natural rubber supply chain and aids in resolving issues through cooperation with direct suppliers and other third parties, 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 report on the Group global website below.

The Group received a grievance against one of its suppliers in 2023. With the support of an international NGO, Earthworm Foundation, the Group engaged with the supplier that was the subject of the grievance to confirm the current status, review the results of an investigation by a third party, and the action plan for improvement. Based on the dialogue, the Group published the grievance list on its website in June 2023, and has been updating it quarterly. The Group will continue to monitor its improvement on human rights as well as environmental management and practice. By operating in an appropriate and transparent manner, we can encourage our business partners to correct and mitigate the risk and support the victims. Having a supply chain with low human rights risk will, in turn, lead to a stable supply for the Group.

For more information, see “Grievance Mechanism.”

The Group’s Global 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 throughout its supply chain using the reporting templates compiled by the Responsible Minerals Initiative (RMI), an 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.