Supply Chain Management

Basic Approach

At the ENEOS Group, we work to fulfill our social responsibilities across the entire supply chain by cooperating with suppliers of raw materials, logistics companies, construction companies, sales companies and others involved in our business activities, while carrying out initiatives for compliance, environmental preservation, human rights and labor, and health and safety.
In accordance with this approach, we have established basic principles on procurement in the Group Code of Conduct and the Group CSR Procurement Policy, based on which we are implementing a number of initiatives. Based on the Group Code of Conduct and the Group CSR Procurement Policy, Group companies have established their own procurement guidelines for business partners in accordance with their business characteristics, and carry out their procurement activities accordingly.

ENEOS Group Code of Conduct (excerpt)
  1. 3.Applicable Scope of the Code of Conduct

    In principle, this Code of Conduct is applicable to all directors, officers and employees who work at ENEOS Holdings, Inc., and its subsidiaries. We also encourage companies that are part of our value chain to comply with this Code of Conduct. These companies include, but are not limited to, suppliers of raw materials, logistics companies, construction companies, and sales companies.

ENEOS Group Procurement Policy

All executives and employees of the ENEOS Group shall comply with this policy when they engage in procuring the goods and services necessary for business operations.
We also request that our suppliers understand this policy and guidelines and cooperate with us in following them.

  1. 1.Social Responsibility
    The ENEOS Group will conduct procurement activities based on the ENEOS Group Code of Conduct, Human Rights Policy, and other policies in each sector.
  2. 2.Selection of Business Partners
    When selecting suppliers, the ENEOS Group will make fair and impartial judgments based on respect for human rights principles in Japan and overseas, and consideration for the environment, quality, and delivery times.
  3. 3.Mutual Trust
    The ENEOS Group emphasizes doing business with suppliers on an equal footing and aims to build mutually trusting relationships.
  4. 4.Information Management
    The ENEOS Group shall appropriately manage information obtained through its procurement activities.
Procurement Guidelines for Business Partners of Principal Operating Companies


For information about our structure, see ESG Management Structure.

Material Issues, Plans and Results

Fiscal 2022 Targets, Results and Progress

Evaluation:Achieved/Steady progressNot achieved

Material ESG Issue Initiative Target (KPI) Results/Progress
Social responsibility in the supply chain Implementation of CSR procurement surveys Conduct CSR procurement surveys at overseas sites in addition to domestic sites, where surveys have already been conducted


Major Initiatives

CSR Procurement

Training session for procurement partners

The Group works with suppliers to promote procurement in which factors such as compliance, environmental impact reduction, human rights and labor, and health and safety are taken into account.
To ensure responsible procurement, employees in charge of procurement receive training to raise their awareness of the ENEOS Group Philosophy, the ENEOS Group Code of Conduct, procurement policies and applicable laws and regulations.
In contracts, which are the basis for purchasing transactions, and in the procurement guidelines for business partners established by each Group company, suppliers are asked to implement initiatives in 12 areas, including compliance, environment and human rights.
In fiscal 2022, based on the results of human rights due diligence and the Corporate Human Rights Benchmark (CHRB) assessment, we continued to focus efforts on “consideration of human rights factors in supplier selection.” For details, see Human Rights Due Diligence.

CSR Procurement Workflow

Checks at Commencement of Business Relationships with New Suppliers

When selecting a new supplier, the Group first confirms that the supplier has no relationship with anti-social forces. In addition to confirming the supplier’s financial position and performance, we conduct a comprehensive risk assessment by asking the supplier to complete our business partner survey, which includes items related to quality and environmental certifications, as well as ESG risks.

CSR Procurement Survey of Suppliers

The Group conducts CSR procurement surveys of its main suppliers to identify potential risks in the supply chain.
Through this survey, we assess risks related to environmental and social issues (human rights, labor, health and safety, etc.). For suppliers whose responses indicate the presence of risks, we conduct more detailed checks of those risks.
In fiscal 2022, we revised the previous CSR procurement survey. In addition, before conducting CSR procurement surveys, we held briefing sessions for the suppliers to be surveyed. As a result, the response rate from ENEOS’s and JX Metals’ main suppliers exceeded 80%. We also newly established the CSR Procurement Business Partner Audit Procedures. Starting in fiscal 2023, we plan to provide support for improvements and conduct monitoring for suppliers for which risks have been identified.

CSR Procurement Survey Process
  • 1.Selection of main suppliers
    We select survey respondents based on our criteria for main suppliers. Main suppliers are selected based on the importance of the transactions in terms of sector*, transaction value, and substitutability, as well as factors such as past CSR procurement survey results, incident history, and ESG risks. In fiscal 2022, only domestic suppliers were subject to the survey.
    • *Suppliers from which we have ordered manufacturing materials, equipment, and construction.
  • 2.Implementation of CSR procurement survey
    We hold briefings on the importance of CSR procurement and our ESG initiatives with the selected suppliers, and then ask them to respond to the CSR procurement survey. The survey consists of 67 questions covering eight categories*: compliance and fair and equitable transactions, provision of products and services, information management, supply chain, environment, human rights and labor, health and safety, and dialogue and cooperation with local communities (see the table below). Items are classified into two categories: those related to the internal management structure, such as the clear documentation of policies and the identification of responsible parties, and those related to the status of activities, mainly those that can be quantified, such as the volumes of contaminated materials discharged and the number of occupational injuries.
    • *JX Metals’ CSR procurement survey consists of a total of 80 questions covering nine categories, including risk management.
  • 3.Tabulation of survey responses and risk assessment
    Survey responses are tabulated and scores are calculated for each question, enabling us to assess the management structure and status of activities of the supplier.
  • 4.Improvement support and monitoring
    We ask suppliers for which risks have been identified to submit improvement plans. After that, we monitor the progress of their improvements.

CSR Procurement Survey Composition (Total of 67 Questions)

Category Item (summary) Number of survey items Breakdown of individual items
Compliance and fair and equitable transactions
  1. 1)Thorough compliance
  2. 2)Fair and equitable transactions
  3. 3)Early detection and prevention of legal violations
  4. 4)Protection of intellectual property rights
12 questions (1) Management structure 7
(2) Status of activities 5
Provision of products and services Appropriate provision of products and services 5 questions (1) Management structure 3
(2) Status of activities 2
Information management Appropriate information management and information disclosure 4 questions (1) Management structure 1
(2) Status of activities 3
Supply chain Supply chain management and supervision 1 question (1) Management structure 1
(2) Status of activities -
  1. 1)Reduction of environmental impacts
  2. 2)Reduction of GHG emissions and energy consumption
  3. 3)Prevention of pollution, management of chemical substances, and reduction of waste
17 questions (1) Management structure 6
(2) Status of activities 11
Human rights and labor
  1. 1)Respect for human rights and protection of worker rights
  2. 2)Discrimination/harass-ment in hiring or at work
  3. 3)Forced labor and child labor
  4. 4)Wages
  5. 5)Working hours and leave
19 questions (1) Management structure 5
(2) Status of activities 14
Health and safety Ensuring safety and health enhancement 8 questions (1) Management structure 3
(2) Status of activities 5
Dialogue and cooperation with local communities Dialogue and cooperation with local communities 1 question (1) Management structure -
(2) Status of activities 1

Risk Analysis and Assessment

Risk assessment involves the analysis and assessment of supplier responses to the CSR procurement survey according to four levels of criteria.
The following table contains a summary of assessment criteria and ENEOS’s response to the assessment findings.
Suppliers receiving the lowest assessment of “non-compliant” are identified as “high-risk suppliers” and are subject to intensive follow-up.
From fiscal 2022, suppliers who responded that they accept foreign technical intern trainees are also subject to follow-up interviews.

Risk Assessment Criteria and Response

Assessment Explanation ENEOS’s response
Good Overall, sufficient measures are being implemented. Each supplier receives a report on the survey results. Assessment results, including areas for improvement, are communicated to suppliers and information, such as the assumed risks for each category and information on relevant international guidelines, is provided.
Generally good Measures are being implemented for a relatively large number of items; risk is low.
Room for improvement Measures are not being implemented for some items; risk is moderate.
Non-compliant Items such as receiving adverse dispositions from government bodies, failing to confirm the facts and implement measures to prevent recurrence of violations, and the occurrence of serious occupational injuries are identified; risk is extremely high. High-risk supplier. In addition to the response above, issue request for improvement and conduct monitoring, along with individual follow-up.
CSR Procurement Survey Results

Since fiscal 2018, we have selected a total of 1,385 suppliers to complete the CSR procurement survey, with responses received from 1,306. Around 80% of suppliers who completed the survey were assessed as “good” or “generally good.” We also checked for child labor and forced labor, human rights risks of particular focus in the supply chain, but have not found any suppliers of concern in this regard.
Starting in fiscal 2023, we have been strengthening follow-up with suppliers. We are working to support the improvement of suppliers for which risks or concerns have been identified through the survey.

CSR Procurement Survey Results (total of 1,306 suppliers)

Improvement Support and Monitoring

In fiscal 2023, for suppliers who were assessed as “generally good,” “room for improvement,” or “non-compliant” based on the results of the survey, we plan to share the survey results, conduct additional interviews and clarify concerns, and then conduct follow-up, such as on-site surveys and discussions on improvement plans as necessary. For suppliers who have been assessed as having potential risks, we provide support so they can improve their initiatives.

Initiatives for Foreign Technical Intern Trainees

According to survey results, we conduct additional interviews with suppliers who responded that they employ foreign technical intern trainees to confirm that there are no issues with the legal compliance and employment status of the supervising organization and the host company.

Membership in Sedex and EcoVadis

In fiscal 2019, ENEOS became a member of both Sedex and EcoVadis, ratings providers for supply chain sustainability.

Confronting the Issue of Conflict Minerals

Industry organizations relevant to the JX Metals Group (including the LBMA1, LPPM2, and RBA3) have established monitoring programs for eliminating conflict minerals in accordance with international trends regarding information disclosure and calls from stakeholders to strengthen monitoring. Under these programs, companies are requested to carry out surveys and undergo external audits by third-party organizations.
Accordingly, the JX Metals Group has included a clause on the exclusion of conflict minerals in its Basic Procurement Policy, and has established and operates management systems to appropriately address this issue.

  1. 1London Bullion Market Association. An industry association composed of financial institutions and others that deal in gold and silver ingot. Inclusion on this association’s Good Delivery List is viewed as a guarantee of high quality and reliability.
  2. 2London Platinum and Palladium Market. An industry association composed of financial institutions and others that deal in platinum and palladium ingot. Inclusion on this association’s Good Delivery List is viewed as a guarantee of high quality and reliability.
  3. 3Responsible Business Alliance. An industry coalition for ensuring responsible conduct in supply chains within the electronics industry.

Initiatives for the Copper, Gold, Silver, Platinum and Palladium Supply Chains

JX Metals Smelting, a producer of gold, silver, platinum and palladium ingot, has established and operates management systems for supply chain due diligence, which includes the following requirements.

  1. 1.Performance of supply chain due diligence before the purchase of mineral raw materials (confirmation of material source origin, performance of risk assessment, item confirmation upon delivery, distribution route confirmation, retention of relevant documents, etc.)
  2. 2.Notification to suppliers of the policy on the exclusion of conflict minerals
  3. 3.Implementation of in-house training on supply chain due diligence and its background
  4. 4.Implementation of internal audits and undergoing external audits

Operation of supply chain due diligence is audited by a third-party organization specified by the LBMA and the LPPM, and the results are reported to the LBMA and the LPPM. As a result of following these procedures, JX Metals Smelting’s gold, silver, platinum and palladium ingot are included on the Good Delivery Lists of the LBMA and the LPPM. Gold is also included on the RMAP Conformant Smelters list established by the RBA and GeSI1. This indicates that we are taking appropriate steps for the elimination of conflict minerals.

For copper ingot, we have established a management system for supply chain due diligence that includes checks on the sources of raw materials, risk assessment, and checks of distribution channels. This system began operation in fiscal 2022. The status of its operation is monitored through external audits by a third-party organization through the procedures for obtaining the Copper Mark2 certification.

  • 1Global Enabling Sustainability Initiative (European ICT industry organization). In light of the high risk of conflict minerals being used in electronics and telecommunications equipment, the RBA and GeSI, which are related to the ICT industry, have collaborated to establish a certification program for the Responsible Minerals Assurance Process (RMAP).
  • 2The Copper Mark: A framework established in 2019 to demonstrate the responsible production of the copper industry and its contribution to the SDGs advocated by the United Nations. The Copper Mark certification is granted after independent third-party organization assessments covering compliance with environmental, human rights, community, governance, and other standards. Even after certification, performance is assessed every three years.

Initiatives for the Tantalum Supply Chain

TANIOBIS GmbH, a producer of tantalum powder, implements a strict program of purchasing checks based on OECD Due Diligence Guidance for procuring raw materials from conflict-affected and high-risk areas. For example, TANIOBIS purchases materials with the ITSCI* guarantee of non-involvement in human rights violations. As a result of these initiatives, TANIOBIS has been included on the RMAP Conformant Smelters list in recognition that TANIOBIS is taking proper measures to exclude conflict minerals.
Since June 2019, moreover, TANIOBIS has been implementing a supply chain due diligence system similar to the ITSCI by means of the Better Sourcing Program (BSP) made available by the RCS Global Group, a global responsible sourcing auditor for the raw materials supply chain.

  1. *ITRI Tin Supply Chain Initiative. An initiative of the International Tin Research Institute (ITRI), a global industry organization. It aims to promote implementation of due diligence from mine to smelter as well as procurement of minerals from mines in conflict-affected areas that do not benefit armed groups, based on OECD guidelines.

Initiatives with Distribution Companies

ENEOS shares its environmental and safety policies and targets for each fiscal year with the contract transport providers responsible for transporting its products in an effort to increase awareness of the environment and safety.
We also promote driving in an eco-friendly manner by holding the Ecodrive & Safety Workshop in partnership with vehicle manufacturers and encouraging participation in the Ecodrive Activity Concours hosted by an external organization. In addition, we are actively engaged in safety awareness activities, such as holding a safe delivery contest to improve tank truck drivers’ driving techniques and unloading work, and sharing good practices of transport companies at meetings of safety managers held every autumn.
JX Metals is working on an appropriate response to the review of contracts with logistics companies, such as separating driving from non-driving ancillary work and considering and introducing fuel surcharges, to reconfirm its compliance with labor-related laws and regulations and laws and regulations related to the motor truck transportation business.
Through our initiatives to achieve sustainable logistics and distribution, we seek to increase the productivity of the entire supply chain, thus contributing to the fulfillment of our responsibility to provide a stable supply of energy and materials.

Support for the White Logistics Movement

ENEOS has supported the White Logistics movement since 2019 and JX Nippon Mining & Metals has supported the movement since 2020. This movement seeks to improve the productivity of truck transport, increase the efficiency of logistics and distribution, and ensure comfortable work environments for women and seniors. Both companies have submitted voluntary action declarations under this movement.

ENEOS’ Voluntary Action Declaration and Initiatives

  1. 1.Proposals and cooperation for improving logistics and distribution
  2. 2.Separation of trunk route transport and collection/delivery transport
  3. 3.Encouraging use of expressways
  4. 4.Deliveries that avoid peak rush hour
  5. 5.Continuation of fuel surcharges
  6. 6.Suspending or stopping transport operations during extreme weather

JX Metals’ Voluntary Action Declaration and Initiatives

  1. 1.Proposals and cooperation for improving logistics and distribution
  2. 2.Separation of driving from other tasks
  3. 3.Consideration of modal shift for CO2 reduction
  4. 4.Agreements on fuel surcharges
  5. 5.Consideration of legal compliance in selection of contract counterparties
  6. 6.Safety measures during loading and unloading
  7. 7.Suspending or stopping transport operations during extreme weather