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Supply Chain

Supply Chain

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Basic Policy

Our basic policy is to comply with the laws and regulations of each country in which we operate and to conduct procurement activities in the global markets for all necessary materials and services at an appropriate quality, price, and with delivery schedule based on fair business relationships. In order to tackle social issues such as the environment, human rights and labor, we strive to strengthen our supply chain to be sustainable and ethical to increase our customers’, business partners’, and our own corporate value.

Please refer here for our procurement policy.

Promotion System

We established the Procurement Division as a global organization that promotes sustainable procurement activities, which reports directly to the CFO. In collaboration with the Business and Production Units, we are working towards optimal procurement activities and the promotion of sustainable, global procurement.

Mid-Term Target for the Supply Chain

In order to realize a sustainable supply chain, we establish a mid-term target as well as a yearly KPI for undertaking initiatives.?

Mid-Term Target (2021 - 2024)?

  1. Obtain a risk evaluation score* below Medium in all key suppliers?
  2. Procure minerals only from RMI-certified smelters following the RMI certification process

    *risk evaluation by RBA-SAQ

2021 KPI

? Activity Target Achievement Rate Target Achievement Outlook
1? Agreement to Renesas Supplier Code of Conduct from key suppliers 100% 100%
2 Obtain RBA SAQ responses from key suppliers 100% 31%
3 Conduct conflict minerals investigation following RMI procedures 100% 100%

Educating Procurement Personnel

As part of promoting corporate ethics within the Procurement Division, we conduct various compliance education on topics such as the Renesas Code of Conduct as well for new employees and employees transferring into the team. We also conduct regular education and training for the most recent CSR issues, such as the environment, in order to penetrate and share information inside the team.?

Promoting Sustainable Procurement through Fair and Equitable Transactions

In order to provide high-quality products and services to our customers, we believe it is important to promote sustainability throughout the supply chain, including taking into considerations the environmental, society, safety and security issues. Therefore, we have created the “Supply-Chain CSR Deployment Guidebook” (in Japanese and English) in 2013, which states specific activities and behaviors we would like the partners that make up our supply chain to comply with. We distributed this "Supply-Chain CSR Deployment Guidebook " to approximately 1,200 suppliers worldwide, promoting sustainable practices throughout the supply chain.

This Supply-Chain CSR Deployment Guidebook is in compliance with the “Supply-Chain CSR Deployment Guidebook” established by the Japan Electronics and Information Technology Industries Association (JEITA). We ask all partners within the Renesas supply chain including secondary suppliers and beyond to follow Renesas’ approach to sustainable procurement and ethical values, and to promote activities from this common perspective.

In 2021, we have re-evaluated the contents of the Supply-Chain CSR Deployment Guidebook after joining the RBA and revised them as the "Renesas Supplier Code of Conduct", which is available in Japanese, English and Chinese, to promote sustainability throughout the entire supply chain.?

We have received agreements and endorsement from many of our suppliers on the initiatives listed in the Renesas Supplier Code of Conduct. So far, we have received endorsement from all of our key suppliers (64 companies in total).

? Number of suppliers? Number of agreed suppliers* Agreement rate
Japan 973 928 95%
North America 16 16 100%
Europe 13 12 92%
China 11 10 91%
Asia Pacific 34 34 100%
Total? 1,047 1,000 96%

*Suppliers who we have agreed to take on the initiatives stated in the Renesas Supplier Code of Conduct, or companies whose Code of Conduct meets or exceeds the standards of the Renesas Supplier Code of Conduct.?

Initiative criteria which we ask partners to undertake initiatives based on the Renesas Supplier Code of Conduct

LABOR
  • Freely chosen employment
  • Young workers
  • Working hours
  • Wages and benefits
  • Humane treatment
  • Non-discrimination/non-harassment
  • Freedom of association
HEALTH AND SAFETY
  • Occupational safety
  • Emergency preparedness
  • Occupational injury and illness
  • Industrial hygiene
  • Physically demanding work
  • Machine safeguarding
  • Sanitation, food and housing
  • Health and safety communication
ENVIRONMENT
  • Environmental permits and reporting
  • Pollution prevention and resource reduction
  • Hazardous substances
  • Solid waste
  • Air emissions
  • Materials restrictions
  • Water management
  • Energy consumption and greenhouse gas emissions
ETHICS
  • Business integrity
  • No improper advantage
  • Disclosure of information
  • Intellectual property
  • Fair business, advertising and competition
  • Protection of identity and non-retaliation
  • Responsible sourcing of minerals
  • Privacy
MANAGEMENT SYSTEMS
  • Company commitment
  • Management accountability and responsibility
  • Legal and customer requirements
  • Risk assessment and risk management
  • Improvement objectives
  • Training
  • Communication
  • Worker feedback, participation and grievance
  • Audits and assessments
  • Corrective action process
  • Documentation and records
  • Supplier responsibility

Click here to view the Renesas Supplier Code of Conduct.

Understanding Risks within the Supply Chain

At Renesas, we ask key suppliers selected based on 1) the transaction amount, 2) the replaceability and 3) the characteristics of the produced products to conduct self-tests and self-improvements using a self-diagnosis survey (note).?

In addition, when starting procurement from new suppliers, we ask new suppliers to report on the actions they are taking towards the criteria listed in the Renesas Supplier Code of Conduct and to agree to undertake the necessary initiatives.?

Furthermore, we use the risk assessment platform provided by RBA to investigate potential risks in all ?suppliers on a regular basis. If a supplier is classified as potentially high risk, we ask them to conduct self-tests and self-improvements using a self-diagnosis survey, similarly to key suppliers.
Note: From 2021, we use the RBA SAQ as the self-diagnosis survey.

In 2021, following the revision to the Renesas Supplier Code of Conduct, we distributed a simplified version of the self-assessment questionnaire (SAQ) to all suppliers. We received responses from 878 companies, and no critical risks were identified from the responses we received.

2021 Activities Results

? Simplified SAQ Onsite Audit*
Number of participating suppliers 878 companies? 12 companies?
Of which, direct materials and outsourced manufacturing suppliers 176 companies? 10 companies?

*Total number of audits conducted by Renesas or a third party (including online audits)?

Examples of Improvement Guidance for Matters Pointed Out During the Audit

Case Improvement Guidance
Free choice of employment There is no policy stating that employees are not forced to work.
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Request to clearly state in the policy
→ Change made to our policy to respect international norms
“As we globalize our business activities, we not only comply with laws such as prohibition of child labor and forced labor, but also respect various international norms, cultures and customs including human rights in each country and region, and contribute to their development.”
Preparing for emergencies There is no evacuation direction or current location information in the evacuation route map. It is not in the orientation that is easy for the reader to understand when posted. Request for improvement of notation
→ Posted the corresponding evacuation route map on the left in each meeting room of the administration building.
Occupational accidents and illnesses First aid kit is not installed anywhere in the target building. First aid kit installation request
→ Installed first aid kits in three locations in the building
Elimination of discrimination No consideration is given to religious customs, and there are no rules. Guidance on the need to make arrangements when situations arise in the future, such as customer visits
→ Considering to clearly indicate how we will handle those situations in work rules or regulations
Young workers There are no rules that stipulate that young workers should not be allowed to engage in dangerous work or work overtime or late at night. Request to add items related to protection of young workers in labor regulations and others
→ Under consideration

Promotion of Green Procurement

Based on Environmental Policies, Renesas is contributing to realize a sustainable society by providing environmentally friendly products and solutions. To realize such a society, it is crucial to reduce the environmental impacts of the parts and materials used within the products. At Renesas, we promote “Green Procurement” where we preferentially procure environmentally conscious parts and materials from companies that are proactive in environmental conservation.

We ask all suppliers that provide parts and materials used as components of our products, suppliers that provide parts and materials used in our products, suppliers that provide parts and products used in the packaging of our products as well as suppliers that deliver our out-sourced products to comply with the Green Procurement Guideline by clarifying the green procurement standards and stating the aims of the guideline which is to reduce the environmental impact of Renesas products.

Through compliance with Environmental RoHS Directives and conducting surveys of the substances contained in purchased products at Renesas, we are able to confirm that each supplier is making progress in environmental initiatives. In addition, for procuring raw materials used in products, we preferentially purchase from suppliers who actively promote environmental protection, whose products have less environmental impact and contain no hazardous substances. We also actively and preferentially select environmentally conscious products in the procurement of goods such as business goods and IT equipment, based on the information on the environmental impact of those goods. We have confirmed that suppliers that cover over 95% of the total transaction amount of outsourced manufacturing recorded in the second half of 2019 and the first half of 2020 are ISO14001 certified.

Guidelines and Standards

Reference: Green Procurement Answer Format

  • There is no format for "Environmental Hazardous Substance Analysis Data" report. Answers are provided as free-form. (Please refer to "Green Procurement Standard Ver.2")
  • Answers are sent via email with the Excel file attached.

Responsible Minerals Procurement Policy

In order not to contribute to human rights violation and the destruction of environment within the supply chain, Renesas is working to realize responsible mineral procurement with the aim of procuring materials that does not include conflict minerals, from OECD conflict-affected and high-risk areas, including DRC and adjoining countries, in relations to risks listed on the Annex II of OECD’s guidelines.?

Responsible Minerals Procurement Policy

Initiative Framework

Step 1: Establishment of Management System

In 2021, we revised the “Supply-Chain CSR Deployment Guidebook” as the “Renesas Supplier Code of Conduct”, based on the RBA code of conduct, and we ask customers to comply with this code of conduct. In addition, internal departments within Renesas work together to establish a structure to identify and evaluate risks.

Step 2:?Identifying and Evaluating Risks within the Supply Chain

We work to realize responsible mineral procurement throughout the supply chain by conducting investigations of suppliers to identify smelters using the industrial standard RMI process and disclosing the results to our customers.

Step 3: Establishing and Executing Strategies Against Identified Risks?

As a result of investigation, if an uncertified smelter is identified in the supply chain, we ask suppliers to make revisions. In addition, depending on the improvement status, we review transactions and execute suspensions if necessary.?

Step 4: Annual Updates on Initiatives

The initiatives undertaken are disclosed on our website on an annual basis.

Results

During the 2021 investigation, we confirmed that there are 235 smelters for 3TG that is included in Renesas Group’s products and 234 of them are on the Conformant Smelter List?by Responsible Materials Initiative (RMI). As of the end of May 2022, we confirmed that the last smelter has been added to the RMI list.

In addition, we have identified all conflict minerals (3TG) contained in our Group's products and plan to confirm that they are refined at Conflict-free smelters certified by a third-party organization, RMI.

? 2020? 2021
? ? Total Tin Tantalum Tungsten Gold
Number of Identified Smelters 232 235 55 37 38 105
Number of Conformant Smelters 232 234 54 37 38 105

Click here for the list of smelters and refiners identified in the Renesas Group supply chain (as of 2021)

In addition to 3TG, since 2019, Renesas also started monitoring cobalt and identifying cobalt smelters within the supply chain. However, because of the lack of regulations, we are facing difficulties with confirming smelters that are using the Cobalt Report Templates (CRTs) from RMI.

Reporting of Investigation Results

Our initiatives related to conflict minerals are embedded into Renesas’ sustainability promotion structure, and the initiatives are regularly reported to the Renesas management team by the Sustainability Promotion Office.

Click here for Renesas' Sustainability Promotion Structure?

Participation in Initiatives

Renesas Joins the Responsible Business Alliance

Renesas has joined the Responsible Business Alliance (RBA) (announced on April 19, 2021), a nonprofit organization founded in 2004 committed to supporting the rights and well-being of workers and communities worldwide affected by global supply chains. By joining the RBA, Renesas will fully support the vision and goals of the RBA to ensure that its manufacturing processes are environmentally responsible and that its workers are treated with respect and dignity.

Renesas Joins the Japan Electronics and Information Technology Industries Association (JEITA) "Responsible Mineral Procurement Study Group"

Renesas has joined "Responsible Mineral Procurement Study Group" established to realize responsible mineral procurement (April 2022). Renesas is a member of the RMI(Responsible Minerals Initiative), which promotes responsible mineral procurement worldwide. By participating in the "Responsible Minerals Procurement Study Group" in collaboration with RMI, Renesas will deepen cooperation with the industry and deal with conflict minerals issues such as the identification of refineries and refineries.

Renesas Joins the CDP Supply Chain Program

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CDP Supply Chain Member logo
Renesas has joined in the CDP (Carbon Disclosure Project) of CDP Supply Chain Program* in 2022. By utilizing this program, which requires disclosure of environmental risks and opportunities, Renesas will strengthen our efforts to reduce CO2 emissions of our business partners in addition to our own domain. Renesas will continue to realize a sustainable supply chain and strive to reduce the environmental burden of the entire supply chain.

*CDP Supply Chain Program: A program provided by CDP that requires suppliers to disclose information on climate change, forest conservation, and securing water resources, and provides feedback on the results of their responses. It is a program that encourages continuous environmental improvement and strives to build a resilient supply chain.
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CDP supply chain program briefing session for Renesas suppliers

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CDPサプライチェーンプログラム説明會の実施
CDP Supply Chain Program Briefing Session (4/6/2022)
On April 6, 2022, Renesas hosted an online "CDP Supply Chain Program Information Session" with approximately 100 suppliers in attendance. During the session, Renesas shared its ongoing ESG initiatives and CDP explained the outline of the supply chain program and how to answer the questionnaire. We also held a technical Q&A session regarding the current GHG emissions and countermeasures.

At Renesas, we will continue to address environmental challenges of the entire supply chain through interactive communication with our suppliers.

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Supply Chain Overview Data

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Ratio of Purchase Amount by Region(2019)