Supply Chain Management

We are committed to development that should contribute to society and strive for lasting transactions, while respecting each other's position and rights when engaged in corporate activities within international society.

Basic Purchasing Policy

The Ushio Group's 10 Action Guidelines expresses our commitment to always respecting the position and rights of the other party in business dealings, to conducting transactions fairly and equitably, and to not taking advantage of a dominant position to impose inappropriate terms or conditions. We also promise to work to prevent corruption and carry out appropriate business transactions in line with socially accepted practices.

Compliance with Laws and Social Norms
Ushio complies with laws and social norms, faithfully conducts contractual obligations and engages in business transactions while abiding by statutes to protect business partners and sound business customs.
Fair and Equitable Business Opportunities
Ushio provides fair opportunities with new business transactions and decides based on equitable and objective judgments.
Decisions regarding transactions are based on a stipulated procedure of comprehensive judgements based on quality, price, stable supply, delivery response, and technological development together with management stability, environmental consideration, social contribution and the state of initiatives for CSR.
Building Relationships of Trust
Business transactions are always maintained on a relationship of trust based on mutual understanding achieved through dialogue and working toward development and lasting transactions.
Environmentally Conscious Purchasing
In regard to the environment, Ushio engages in green procurement, complying with international regulations, statutes, agreements, guidelines, customer standards and our own standards.
Maintenance of Confidentiality
Confidential information from companies, business partners or any third party will not be disclosed without following prescribed procedures, nor will it be leaked. Regarding procurement activities, unfair means will not be used to acquire confidential information from business partners or any third party.
Procurement Activities
Procurement activities will be conducted by those in charge of purchasing in the Procurement Department who have undergone the prescribed education and guidance.

Supplier Selection Guidelines

Supplier Selection Guidelines

CSR Procurement Policy

Ushio is meeting its social responsibilities as a corporate citizen by supplying superior products and services to the global market through free and open corporate activities, promote ESG management, and work to overcome issues.
For its procurement activities, in the spirit of encouraging coexistence and co-prosperity, Ushio has defined the five points below as the Ushio CSR Procurement Policy, encapsulating its respect for laws, social norms and environmental protection.
Similarly,regarding the supply chains of its key business partners, Ushio asks them to conduct their procurement activities with full understanding of Ushio's own CSR Procurement Policy.

Human Rights Alongside Occupational Health and Safety
We respect the fundamental human rights of all people, with an eye to living in a society where people of diverse personalities and values can be accepted and work together.
*In particular, prohibit of child labor, prohibit of forced labor bans, no discrimination, respect for the right to freedom of unity, respect for the right to collective bargaining, reduction of overwork hours, exceeding the minimum wage, health and safety initiatives.
At your company and your supply chain comply, along with respect for laws and regulations, we ask that you properly safeguard both the working environment and occupational health and safety.
Environmental Consideration, Green Procurement
In order to realize a sustainable society, we take steps to protect the environment and effectively utilize resources, together with supplying society with environmentally conscious products.
*Environmental conservation means conservation of biodiversity, reduction of greenhouse gases (GHG such as CO₂), reduction of waste, prevention of pollution of soil, air and water quality. Efficient resource utilization entails minimizing water consumption, conserving resources, and more.
At your company, we ask that you implement environmental management through efficient use of energy and water resources, reduction of CO₂ emissions, reduction of waste, reduction of environmental load such as pollution prevention, and efforts for biodiversity conservation, and manage chemical substances included in products, and supply parts and components in conformance with the relevant laws (or standards or qualifications). In addition, we ask that you manage the chemical substances and supply parts and materials that comply with laws and regulations (standards and specifications). In connection with this, Ushio has established our Green Procurement Standards, which we expect our suppliers to adhere to.
Ensure Product Safety
We supply safe, quality products and services that are competitive in the global market.
Please consistently strive to maintain and improve your company’s quality and pursue relevant research and development.
BCP (Business Continuity Planning)
We recognize supply stability as an important social responsibility. Accordingly, we believe it is important to consider in advance and prevent the emergence of situations that could disrupt supply stability, and to recover as quickly as possible should such circumstances unavoidably arise.
We ask that your company also strive to develop a BCP system. To this end, we request that you prepare a business continuity plan (BCP) designed to avoid interruption of critical operations in the event of large-scale disasters or other events and achieve recovery in the fastest possible timeframe. We also ask that you grasp the supply chains of your own business partners and take voluntary steps to ensure supply stability.
Fair and Equal Transactions, Legal Compliance
We conduct transactions with companies that respect social norms and comply with the law.
Similarly, we respect the position and rights of our business partners, conduct sound, fair and equal transactions, and cultivate both mutual cooperation and relationships of trust.
We ask that you properly understand the law, develop a system for responding in a timely manner to legal revisions and other social changes, and strive for sound corporate management.

*Specifically, these involve initiatives pertaining to the promotion of fair and equitable corporate activities, as well as efforts to prevent all forms of corruption. This includes the management of treatment of public officials; prevention of inappropriate profit giving (bribery); prevention of unfair transactions such as collusion, cartels, and abuse of dominant positions; elimination of relationships with antisocial groups; protection against unauthorized use of third-party intellectual property and copyrights; prohibition of insider trading; and prohibition of conflict of interest activities.

*The decision to engage in a transaction will be based on a comprehensive judgment made after investigating and confirming the status of each of these initiatives, including those described above, in accordance with established procedures.

Information Security
In recent years, the utility and importance of information have grown, as have social responsibilities in relation to it. One of the most important issues today is protecting with certainty personal information handled in the course of business activities, corporate information, and other information assets from the threat of leakage, unauthorized alteration or other problems. Furthermore, based on the recognition that information is an asset that creates value and a source of increasing corporate value, we are promoting increased information security awareness among employees and the development of a risk management system, etc.
Please strive to develop an adequate information management system at your company, and prevent leakage of confidential information to outside parties.

*Supplementary explanation.

We will provide the CSR procurement policy in the required language(Language of contract, etc.).
The CSR procurement policy is based on the Ushio's Environmental Policy.

Initiatives for CSR Procurement

As stated in our Management Philosophy, Ushio has been implementing initiatives from an ESG management perspective. In addition to environmental measures, the Ushio Group's business partners are promoting CSR procurement throughout the supply chain, such as consideration for human rights, which has become increasingly important in recent years. In the past Environmental Action Plan, we established a system that enables us to conduct CSR procurement surveys on a regular basis. We have improved our CSR response capabilities through dialogue, including explanations to business partners, implementation of surveys, feedback on evaluation results, audits based on evaluations, and education and guidance. In collaboration with group companies and business divisions, we are developing activities to promote understanding and dissemination of CSR procurement policies throughout the supply chain.

As for one of our material issues, starting in fiscal 2021, we will continue to address the periodic implementation of CSR procurement surveys and dialogue as priority issues. We will review the evaluation standards of the CSR Procurement Survey with the aim of further improvement and development, establish KPIs for recovery rates and risks, and expand them to the whole group companies. In addition, as an environmental initiative related to our procurement, we will focus on calculating Scope 3 Category 1 (CO₂ emissions from purchased products/services) and other topics to make CSR-oriented procurement efforts.

Plan for CSR Procurement and Actual Results

Plans Status of achievement* Actual results
Ushio Inc.’s domestic production bases target for D and E rank rates of 5% or less in the CSR procurement survey
Aim to increase the rank by visiting D and E rank suppliers to hear about the status of their CSR procurement and provide guidance.
The rate of D and E rank suppliers declined to 4% as a result of visits to hear about the status of their CSR procurement and provide guidance. Suppliers who did not reach C rank managed to increase their level.
Improvements to CSR procurement survey table
Review questions ahead of the next CSR survey
Reviewed questions ahead of the next CSR survey, and finalized survey content
Maintain Ushio Inc.’s domestic production bases target for D and E rank rates of 5% or less in the CSR procurement survey
Reconfirm situation of D and E rank suppliers
Prepare CSR procurement survey
Review implementation methods ahead of the next CSR survey
Medium- to long-term targets
Realize a supply chain with lower environmental impacts
Reduce ₂ of parts and materials
Engage in CSR procurement with suppliers (including logistics) mindful of the SDGs


CSR Procurement Survey

Our ongoing efforts in risk assessment extend to our business partners, with the Harima Division and Gotemba Division consistently conducting CSR procurement surveys.
In fiscal 2020, we expanded our survey scope to include the Kyoto Division, employing the "CSR Procurement Self-Assessment Questionnaire" developed by the Global Compact Network Japan (GCNJ). The results revealed notable improvements across all surveyed items compared to the 2017 data. We attribute this progress to the increasing prevalence of CSR awareness among our business partners, indicative of a growing understanding of ethical business practices. The comprehensive CSR Procurement Self-Assessment Survey comprises nine key items, addressing both "environment" and "society." Using a 5-point scale ranging from A to E, where C or above is considered acceptable, D indicates suppliers requiring improvement, and E denotes high-risk suppliers with whom continued business is not advisable. Suppliers ranked D and E undergo focused follow-up measures. In fiscal 2020, we identified 43 such suppliers. We successfully concluded follow-up with 14 business partners in fiscal 2021 and are sustaining ongoing efforts with 11 business partners in fiscal 2022, focusing on those with whom we aim to continue our business relationship. Engaging in meaningful dialogues with suppliers who may have room for improvement in their CSR initiatives, we believe that mutual understanding and collaboration can lead to shared growth. Moreover, we initiated CSR procurement surveys across our group companies in fiscal 2021.In fiscal 2023, we requested CSR Procurement Surveys from a total of 71 suppliers. These included business partners ranked DE in the survey in fiscal 2020 as well as business partners with whom we have newly started business.

We conduct rigorous due diligence when onboarding new suppliers. This process specifically involves assessing ISO 14001 certification, scrutinizing their environmental management system status, which encompasses understanding our Green Procurement Standards and evaluating chemical substance usage. In addition, we will not do business with third parties who are confirmed to have partaken in corruption or bribery.

Results of Self-Evaluation Conducted by Each Business Partner about CSR Procurement (Comparison between fiscal 2017 and fiscal 2020)

Results of Self-Evaluation Conducted by Each Business Partner about CSR Procurement (Comparison between fiscal 2017 and fiscal 2020)

Chemical Substances Management System (CMS)

The number of substances targeted by the REACH directive has grown, and market demands and changes, including additional regulations, have rapidly accelerated, leading to a greater burden on our business partners. Ushio also uses a database to review the chemical substances contained in lamp products and products that contain many components targeted for review, as well as manages the data entered; thereby ensuring compliance with various regulations on chemical substances.
As corporate activities become more global in nature, our business partners are also going global following the transfer of production overseas. At our production bases around the world, we conduct and respond to surveys on chemicals contained in our products using the chemSHERPA format.

Checking for Conflict Materials

Within Ushio Group’s operations, materials such as tungsten and tantalum are utilized for lamp electrodes and filaments. In addressing human rights concerns associated with Ushio’s business activities, we have identified key human rights issues, particularly focusing on materials used. Issues like child labor and forced labor are recognized as significant concerns. To mitigate these concerns, we have implemented a "Basic Policy on Conflict Minerals" that strictly regulates the use of conflict minerals both within the Ushio Group and among our business partners. Moreover, we actively engage in surveys to monitor and assess the use of conflict minerals throughout our supply chain. The results of these surveys (RMI/CMRT*) are diligently reported to our customers.

Ushio checks for the use of any conflict minerals by its business partners at each company, and regularly updates information. Previously, we confirmed whether or not conflict minerals were used by the relevant business partners. From fiscal 2016, we have expanded the scope of confirmation to cover identifying mines and refineries.

(Conflict Minerals)

Conflict minerals is the generic term for minerals that are produced in areas of conflict and are a source of funding for local armed groups when purchased. As a result, there are concerns about companies' complicity in the conflicts affecting the production areas of these minerals. In accordance with the clause on conflict minerals in the US Securities and Exchange Commission's Dodd-Frank Wall Street Reform and Consumer Protection Act, companies listed on US stock exchanges are legally obligated to disclose and report on the use of conflict minerals in their products. Conflict minerals include tantalum, tin, gold, and tungsten produced in the Democratic Republic of the Congo or adjacent countries.

Basic Policy Statement for Conflict Minerals
Do not knowingly procure specified materials (tin, tantalum, tungsten, gold) from "Armed group in Conflict region" of Democratic Republic of Congo (DRC) and in surrounding countries.
We also expect our partners to support this policy throughout the supply chain to ensure that only conflict free materials and components are used in the parts and components we procure. We also conduct the required investigation.
If we discover the use of these materials that are considered to be non-conflict free, we will stop our procurement, and take appropriate actions to make our products conflict free.

April 1, 2024

Representative Director
President and Chief Executive Officer

Takabumi Asahi

*RMI/CMRT: The Conflict Minerals Reporting Template (CMRT) is a freely available standard template developed by the Responsible Minerals Initiative (RMI).

ESG in Supply Chains

Under Ushio's Green Procurement Standards, the Company asks its business partners to build an environmental management system such as ISO 14001 or Eco Action 21. Ushio conducts surveys of its business partners’ environmental initiatives as needed. We actively promote local procurement practices to minimize environmental impact and contribute to local economic development. Prioritizing business partners with exemplary response capabilities, Ushio is dedicated to sustaining and enhancing environmental conservation efforts throughout its supply chain.

The ongoing CSR Procurement Questionnaire follows through and asks for self-assessments on initiatives related to avoiding contamination, effective use of resource energy, and reduction of greenhouse gases and waste in business division activities. By collecting the overall results and confirming the position of each company, Ushio strives to raise the awareness of its business partners.

We are also committed to fostering a culture of respect for human rights among our business partners. This includes initiatives to prevent child and forced labor, prohibit discrimination, ensure equal opportunities, recognize the right to organize and bargain collectively, eliminate excessive working hours, maintain fair wage levels, and uphold health and safety standards. Ushio disseminates information through our website, conducts periodic questionnaires, and engages in educational efforts, including the distribution of materials, to keep our business partners informed.

Contributing to Initiatives through Corporate Collaboration within Industry Bodies

In October 2010, Ushio signed and declared its support for the United Nations Global Compact's Ten Principles. Ushio has joined the Supply Chain Working Group of the Global Compact Network Japan, and as a member, it is conducting activities in pursuit of its vision for CSR procurement activities. One of Ushio's accomplishments was contributing to a proposal published in 2013 entitled "Building the Sustainable World: A Vision of Desirable CSR Activity in the Supply Chain," together with other participating companies.

A Vision of Desirable CSR Activity in the Supply Chain
An Introduction to Sustainable Procurement ―Promoting CSR in the Supply Chain―
CSR/Sustainable Procurement Self-assessment Tool Set

Building Relationships with Business Partners

Ushio holds explanatory briefings for its business partners as necessary and in a timely fashion, following revisions to laws, regulations and standards, and other factors. On revising Ushio's green procurement standards, we explained our review of all the standards in line with amendments to laws and regulations and the additional chemical substances our business partners will need to check. With regard to CSR procurement, we explained the Ushio CSR Procurement Policy and conducted the CSR Procurement Questionnaire.

Through questionnaires and explanatory briefings about our procurement activities, we have our business partners learn more about the meaning behind CSR procurement at Ushio, the benefits of working together to mutually develop CSR activities and the strengthening of relationships with customers. Moreover, Ushio conducts promotion and awareness-raising activities by sharing its vision for CSR with business partners.

At the same time, when necessary, Ushio interviews and audits business partner whose CSR procurement initiatives need improvement, and provides guidance in those areas. We are taking initiatives to improve our CSR procurement activities by helping our business partners in these ways. Through these initiatives, Ushio is working to build relationships with its business partners in order to more effectively and efficiently advance CSR procurement activities.

Ushio's products are shipped worldwide to customers spread out around the globe. Moreover, in production and procurement, we now conduct business with overseas counterparts on a daily basis. In order to address export-import controls, which require strict execution, and the laws and regulations of various countries, we must respond promptly to requests and inquiries concerning the environment from our customers at overseas bases and divisions. For this, the Harima Division and overseas bases have formed collaborative teams and are working to enhance the quality of the environmental responses of overseas bases.

Education Programs for Internal Procurement Departments

Ushio provides the necessary training programs for procurement managers. These programs provide a greater understanding of the Company's procurement practices, along with covering the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, environmental regulations, and the Foreign Exchange and Foreign Trade Act, among other matters. Efforts are made to ensure that procurement managers conduct appropriate transactions and maintain good relationships with business partners.

In detail, for all employees involved in procurement duties, Ushio implements measures to ensure that appropriate transactions are undertaken at all times, including holding study sessions on the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors and conducting internal audits. Moreover, Ushio has embraced "Thinking and acting together with business partners" as its basic principle. For example, if delays in delivery or quality issues arise, we respond by investigating the cause of the problem, taking countermeasures and so forth. These activities have produced benefits such as improving the delivery deadline compliance rate.