Sustainability / Social Report Respect for Human Rights

Daicel Group Human Rights Policy

At the Daicel Group, we recognize that, in order to progress and grow in tandem with society, it is imperative that we respect the human rights of anyone and everyone involved in or connected to us through our business activities. To fulfill this responsibility, the Daicel Group hereby establishes the Daicel Group Human Rights Policy (“the Policy”).

Basic Position
We at the Daicel Group value the happiness of our employees as well as the happiness of society and all people. Human rights are fundamental for happiness, and the Ethical Standards of Daicel Group declare our determination to respect the human rights of all individuals according to international standards.

Moreover, as a signatory of the United Nations Global Compact, we fully support international standards for human rights. We acknowledge the standards listed in the United Nations International Bill of Human Rights (Universal Declaration of Human Rights and both International Covenants), the core conventions set forth by the International Labour Organization (ILO) in their Declaration on Fundamental Principles and Rights at Work*, and the United Nations Guiding Principles on Business and Human Rights. Accordingly, we promise to continue and promote efforts to respect and address the human rights in line with the above standards.

Scope of Application
The Policy applies to all executives and employees of the Daicel Group. The Daicel Group will also encourage its business partners and suppliers to support the Policy, and in concert with them, will promote activities to fulfill its responsibilities relating to human rights.

Human Rights Due Diligence
The Daicel Group will establish a system of human rights due diligence which will be continuously implemented. Human rights due diligence is a series of processes that includes identifying any adverse human rights impact connected to the Daicel Group and preventing or mitigating potential risks to human rights.

Correction and Remedy
When the Daicel Group identifies that it has caused or contributed to an adverse impact on human rights contrary to the Policy, it will promptly take corrective and remedial actions through appropriate procedures.

Education and Training
The Daicel Group will provide appropriate education and training to ensure that the Policy is integrated into all business activities and that human rights due diligence is effectively implemented.

Applicable Laws and Regulations
The Daicel Group will observe laws and regulations of countries and regions where it conducts business. However, if a conflict occurs between internationally recognized standards of human rights and the standards stipulated by laws and regulations of an individual country or region, the Daicel Group will pursue a direction that respects international principles of human rights.

Dialogue and Consultation
In implementing the Policy, the Daicel Group will seek expert advice on human rights both from within the company and external independent experts and engage in dialogue and consultation with our Group stakeholders.

Information Disclosure
The Daicel Group will publicly disclose the progress and results of its human rights activities based on the Policy.

Enacted July 30, 2020
Last revised August 1, 2023

*Declaration on Fundamental Principles and Rights at Work includes ten conventions in five categories

Freedom of association and the effective recognition of the right to collective bargaining Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87)
Right to Organise and Collective Bargaining Convention, 1949 (No. 98)
The elimination of all forms of forced or compulsory labour Forced Labour Convention, 1930 (No. 29)
Abolition of Forced Labour Convention, 1957 (No. 105)
The effective abolition of child labour Minimum Age Convention, 1973 (No. 138)
Worst Forms of Child Labour Convention, 1999 (No. 182)
The elimination of discrimination in respect of employment and occupation Equal Remuneration Convention, 1951 (No. 100)
Discrimination (Employment and Occupation) Convention, 1958 (No. 111)
A safe and healthy working environment Occupational Safety and Health Convention, 1981 (No. 155)
Promotional Framework for Occupational Safety and Health Convention, 2006 (No. 187)

Efforts to Instill Respect for Human Rights into Practices

Human Rights Due Diligence

Human rights due diligence is a series of processes that include identifying any adverse human rights impact associated with a company and preventing or mitigating potential risks to human rights. The Daicel Group has established a clear human rights policy in line with the UN Guiding Principles on Business and Human Rights and has been conducting human rights due diligence since FY2020/3 based on accepted procedures in these principles.

Initiatives for Group Companies

Our human rights due diligence process for Group companies consists of risk investigation and assessment; prevention, mitigation or corrective and remedial actions; monitoring and planning; and information disclosure.
For the first step in the process, risk investigation and assessment, we have been sending questionnaires on human rights and labor practices to Group companies in Japan and overseas and have been conducting interviews based on their responses to the questionnaire.
In addition to the questionnaire, we request Group companies to submit substantiating documents as necessary. These documents correspond to the risk assessment checklist, and we implement a more detailed risk assessment through document checks and interviews.

In FY2023/3, in the risk investigation and assessment stage, the results of the survey revealed no human rights violations by Daicel Group companies or cases requiring corrective and remedial actions.

Implementation ratio of human rights due diligence

Group companies in Japan: conducted at 18/19 companies*
Group companies overseas: conducted at 18/38 companies*

*Denominators indicate the number of Group companies subject to human rights due diligence (as of March 31, 2023)
The number of companies changed compared to the previous fiscal year due to M&A and organizational changes.

However, during the human rights due diligence, we found several issues of concern such as Group company responses to revisions in local laws and regulations in each country, and observance of the statutory employment rate of persons with disabilities. We will continue to address these issues with appropriate countermeasures.
Daicel plans to complete implementation of human rights due diligence for all major Group companies by FY2026/3.

Initiatives for the Supply Chain

The Daicel Group promotes initiatives that ensure respect for human rights across its supply chain by addressing human rights and labor practices in the Daicel Group CSR Purchasing Guidelines, in addition to its Human Rights Policy.

By FY2023/3, we had distributed Certificates of Confirmation to 768 of Daicel’s major suppliers (accounting for over 85% of total procurement) in order to confirm that they understood the content of the Daicel Group CSR Purchasing Guidelines, and we received signatures from 678 companies (response rate of 88%). Since FY2021/3, we have instituted a rule that requires new suppliers to sign a Certificate of Confirmation and the response rate from new suppliers has been 100%.

We also ask major suppliers to complete a Self-Assessment-Questionnaire (SAQ) on CSR procurement, which includes assessment of human rights and labor practices, to identify any human rights risks in our supply chain.

In addition to these Certificate of Confirmation and requests to complete SAQ on CSR procurement, we have also launched an initiative focused on human rights. Following the philosophy of the UN Guiding Principles on Business and Human Rights, we once more prepared risk mapping and identified areas where we should prioritize actions. Taking this into account, in FY2023/3, we conducted an assessment of 28 suppliers in Japan. In FY2024/3, based on the results of this assessment, we will hold discussions with relevant companies and provide assistance.

Sustainable Procurement

Human Rights Education and Training

The Daicel Group provides employees with human rights education and training based on the Daicel Group Human Rights Policy to deepen understanding of human rights.
We incorporate human rights topics into training held annually during compliance month, and this provides human rights training regularly through e-learning and other means. In FY2023/3, a total of 9,338 employees from Daicel and its Group companies inside and outside of Japan took part in this training (participation rate of 73.4%)*.
We also provide an opportunity for people to learn about human rights through educational materials on corporate compliance, which we distribute to the entire Group companies every month. These materials include a wide range of human rights related content, such as forced labor, child labor, human trafficking, sexual harassment, workplace bullying, Sexual Orientation and Gender Identity (SOGI) discrimination, and working with people from different cultural backgrounds.
In addition, we educate employees by focusing on harassment through training by mission or capability-based grading and preparatory training prior to overseas assignments.

*Covers a total of 12,716 employees including contract workers and temporary employees.

Reporting and Consultation

The Daicel Group operates the Compliance Help Line System (whistleblower system) to receive reports and provide consultation on issues that include human rights. Issues can be raised anonymously to protect the identity and privacy of whistleblowers. Rules are also in place to prohibit any adverse treatment of whistleblowers.
In addition, compliance consultation information is available on our website, which can be used by stakeholders outside the Daicel Group to report or consult on human rights issues as well as other issues.

Compliance Help Line System (Whistleblower System)