Responsible Supply Chain

The Brother Group makes its "Procurement Policy" and "CSR Procurement Standards" publicly available and shares its CSR procurement concept with parts and materials suppliers. The policy and standards cover a wide range of fields, including human rights and labor, the rights to organize and bargain collectively, safety and health, global environmental protection, fair trade and ethics, product quality and safety, raw materials, information security, and social contribution. The Brother Group complies with local laws and regulations and supports workers' collective bargaining rights by conducting collective negotiations and respecting communication between management and employees on working conditions and management practices.

In addition, the Brother Group is also implementing initiatives for the responsible procurement of minerals, such as conducting a mineral procurement survey and establishing a working group to confirm that mineral resources that are mined in conflict-affected and high-risk areas^*, and may be involved in violation of human rights, violation of labor rights, environmental degradation, etc. are not used.

• Conflict-affected and high-risk areas: areas with a high risk of armed conflict, violence, and human rights violation

• Japanese version of the procurement policy and standards

• Chinese version of the procurement policy and standards [PDF/480KB]

Since Brother Industries, Ltd. (BIL) joined the Responsible Business Alliance (RBA) in January 2019, we have been strengthening our supply chain risk assessment and the implementation system for corrective actions based on the assessment results in the areas of labor, health and safety, environment, ethics, and management systems as stated by the RBA in its Code of Conduct.

RBA Recognition Received

The Brother Group has been having its facilities audited by a third-party auditor approved by the RBA. As a result, since FY2022, its four manufacturing facilities have received RBA recognition, and the Group has achieved one of its sustainability goals the Group has set to address its materiality, "Attain RBA Gold certification for three Group manufacturing facilities." Going forward, the Brother Group will continue to further raise the level of its activities toward building a sustainable supply chain, including improving the safety of working environments at the Group's manufacturing facilities and minimizing the environmental impact.
For details on facilities with RBA recognition, please view Responsible Business Alliance under Management with an Emphasis on Sustainability—Participation in External Initiatives.

Using a Self-Assessment Tool

In FY2023, BIL used the RBA's self-assessment tool at a total of 15 facilities: 14 manufacturing facilities^* in its Printing & Solutions Business (P&S Business) and Machinery Business, as well as the newly added Nissei Business and Personal & Home Business, plus BIL's head office. After assessing the internal policies and procedures and the status of their implementation and operation in response to RBA requirements and taking corrective actions to address any deficiencies, BIL has confirmed that there are no significant risks at any of its facilities. Through these activities, the Brother Group is working toward complying with the RBA Code of Conduct at its manufacturing facilities and expanding the number of facilities subject to self-assessment as part of its commitment toward "pursuing a responsible value chain" as stated in Materiality.

• BROTHER INDUSTRIES (VIETNAM) LTD., BROTHER INDUSTRIES (PHILIPPINES), INC., BROTHER TECHNOLOGY (SHENZHEN) LTD., ZHUHAI BROTHER INDUSTRIES, CO.,LTD., BROTHER INDUSTRIES (U.K.) LTD., BROTHER INDUSTRIES (SLOVAKIA) s.r.o., BROTHER INDUSTRIES (U.S.A.) INC., MIE BROTHER PRECISION INDUSTRIES, LTD., BROTHER MACHINERY XIAN CO., LTD., NISSEI CORPORATION, TAIWAN BROTHER INDUSTRIES, LTD., BROTHER INDUSTRIES SAIGON, LTD., BROTHER INDUSTRIES, LTD. (Hoshizaki Factory and Kariya Factory)

Developed CSR Procurement Level-up Program

In FY2020, the Brother Group developed its CSR Procurement Level-up Program to improve CSR procurement at its suppliers. This program comprises the following three steps. Repeatedly following these steps helps improve the level of CSR procurement at each supplier. The program has evolved further since FY2023 as the information to be understood for consent changed from the Brother Group's CSR Procurement Standards to the RBA Code of Conduct to promote activities toward RBA compliance.

Regarding the RBA Code of Conduct, explanations are given to suppliers using supplementary information to help them understand and comply with it. Suppliers' consent to promote the activities is confirmed by signing a Confirmation Form.

The state of compliance with the RBA Code of Conduct is checked through self-checks using the CSR questionnaire (RBA-compliant). Risk assessment of suppliers is conducted based on the responses to the CSR questionnaire.

Suppliers that have risks discovered as a result of the assessment are requested to make improvements while ensuring meetings and other communication situations. The state of improvement is checked by combined means of audits and monitoring, and support for improvement activities is provided.

This program is being deployed not only for existing suppliers but also new ones. For existing suppliers, based on the evaluation results about the state of compliance with the RBA Code of Conduct, areas of improvement are clarified for each supplier, the results are given as feedback to the suppliers, and they are requested to make improvements. For new transactions, compliance with the RBA Code of Conduct is confirmed so that CSR procurement is carried out even more steadily in the future. Through this program, the Brother Group seeks to further improve the level of CSR procurement together with suppliers.

Details of Activities under and Results of the CSR Procurement Level-up Program

STEP1: Understanding and Consent; Activities to promote awareness of the RBA Code of Conduct

The Brother Group requests suppliers of its manufacturing facilities (P&S Business) to understand and comply with the RBA Code of Conduct.
To ensure understanding and compliance, the Group has prepared and is providing supplementary information to the RBA Code of Conduct, listing requests and matters it would like its suppliers to cooperate in so as to facilitate further understanding among its suppliers. The Group confirms suppliers' consent to promote the activities by obtaining their signatures on Confirmation Forms. In FY2023, the Group received consent from 649 business partners both in and outside Japan. In addition, when starting new transactions, the Group explains the RBA Code of Conduct to obtain understanding and cooperation.

In April 2024, we held supplier explanatory meetings at manufacturing facilities (P&S Business) in Japan, Vietnam, the Philippines, and China. On-site—and also online—explanatory meetings were held with a total of 734 participants from 408 supplier companies.
These meetings explained the "CSR procurement activity results for FY2023" and "CSR procurement activity plans for FY2024," as well as "compliance with the RBA Code of Conduct" and "continuation and promotion of activities based on the CSR Procurement Level-up Program." We also requested suppliers to conduct a "CSR Questionnaire Survey and a Forced Labor Questionnaire Survey for FY2024." The meetings served as a good opportunity to establish relationships built on trust between suppliers and us.

In FY2022 to raise the level of CSR procurement among our suppliers, we asked our parts and materials suppliers in the P&S Business to appoint two or more CSR procurement personnel^*. In FY2023, we worked with the appointed CSR procurement personnel at each supplier to help them formulate their own CSR Procurement Standards that specify information in the areas of labor, health and safety, the environment, and ethics. In formulating the standards, the CSR procurement personnel at the Brother Group's overseas facilities spoke directly with CSR procurement staff at suppliers, providing specific explanations of the CSR Procurement Standards and the purpose of the formulation of the standards. Direct dialogue enabled clarification of any points of uncertainty or areas that needed strengthening in formulating the standards, further deepening suppliers' understanding of CSR procurement. Through activities like this, we will continue to promote and improve the level of CSR procurement among our suppliers.

• For P&S Business manufacturing facilities

STEP2: Confirmation of compliance and assessment; Conduct of CSR questionnaire and risk assessment of suppliers

The Brother Group implements CSR questionnaire activities on a two-year cycle for suppliers in Vietnam, the Philippines and China, where the manufacturing facilities of the P&S Business are located. In FY2020, we revised our CSR questionnaire to check the state of compliance with the RBA Code of Conduct at our suppliers. The revised CSR questionnaire comprises questions in the five areas of labor, health and safety, the environment, ethics, and management systems. The questionnaire is configured to check the state of efforts at suppliers by means of self-checks. For example, in the area of labor, the items being checked include the absence of forced labor and child labor and compliance with local labor laws and regulations. In FY2023, we conducted a CSR questionnaire with 69 major suppliers in the Philippines and China to conduct a risk assessment.
Together with the CSR questionnaire, we also sent questions about global environmental conservation to check the state of efforts at our suppliers regarding their activities to reduce greenhouse gas emissions. We asked suppliers to provide numerical values, such as the "greenhouse gas emissions (CO₂ equivalent)" produced by their company and "reduction of the volume of water intake." Some suppliers also set their reduction targets in these categories and report on the degree of achievement of the targets.

STEP3: Improvement activities and audits; Conduct of CSR procurement audits

We request improvement and review the results of improvement activities from suppliers that are found to have risks in the CSR questionnaire. In FY2022, we provided feedback on the evaluation results to all suppliers that completed the CSR questionnaire, and conducted individual interviews with suppliers according to the evaluation results, requesting improvement and reviewing the results of improvement activities from suppliers that were found to have risks. For those suppliers that were found to be at risk, we requested them to make improvements and confirmed the results.

Besides requesting improvements from suppliers with risks discovered through the CSR questionnaire, we have also built a system where the Brother Group auditors conduct CSR procurement audits on suppliers' manufacturing facilities and get them to rectify any nonconformities that are discovered.
In FY2023, CSR procurement audits were conducted on two suppliers identified to be audited according to the results of CSR questionnaire assessment. Five suppliers in Vietnam, 14 in the Philippines, and two in China, all of which we newly conduct business with, were audited online in the areas of labor, ethics, health and safety, and management. For each nonconformity found as a result of the audit, Brother Group auditors explained the causes of the nonconformity and the measures required to become compliant, giving specific examples, and asked suppliers to take corrective actions.
Through these activities, the Brother Group seeks compliance with the Procurement Policy and CSR Procurement Standards together with our suppliers.

Implementing questionnaires on supplier CSR activities and visits to supplier companies at each manufacturing facility; Selected five Outstanding CSR Suppliers in China from submitted entries

Aiming to further promote the CSR activities of its suppliers, the Brother Group has been conducting questionnaire surveys about their CSR efforts, selecting and honoring excellent examples since 2015 at Machinery Business manufacturing facilities in Japan and China.

In China, questionnaire surveys on suppliers' CSR activities were similarly conducted in September and October 2023. We received responses from 82 companies. Furthermore, we asked suppliers to submit examples of their CSR activities. Of the submissions we received from 14 companies, we selected and awarded five outstanding CSR companies. One award-winning supplier actively conducts various activities—such as enthusiastic training of employees and development of better working environments, as well as promotion of business activities with consideration for the environment and social contribution activities for the local communities—and we asked the supplier to share these as concrete, outstanding examples. The supplier positively responded to the request.

The Brother Group continually strives to develop relations of mutual trust with its business partners and grow together with them to quickly deliver superior value to customers.

A part of the minerals (tantalum, tin, gold and tungsten, cobalt, mica, etc.) mined in conflict-affected and high-risk areas, such as the Democratic Republic of the Congo and adjoining countries are some sources of funds for local armed groups, and there are concerns that transactions for such minerals may promote conflicts and involve matters such as human rights violations, labor issues and environmental degradation problems.
In promoting management with an emphasis on sustainability, the Brother Group recognizes the human rights violation, labor rights violation, environmental degradation, etc. in mining and trade of those minerals as important social issues.
To implement responsible procurement of minerals, the Brother Group carries out surveys on the use of aforementioned conflict minerals and will steadily undertake efforts toward ensuring transparency of mineral procurement in the supply chain and avoiding the use of conflict minerals while cooperating with suppliers.

To promote responsible procurement of minerals across the Brother Group's entire supply chain, we are undertaking the following initiatives according to a five-step framework based on the "Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas" issued by the Organisation for Economic Co-operation and Development (OECD).

For the Brother Group's approach to the responsible procurement of minerals, we have examined systems and methods to engage in the responsible procurement of minerals since 2014 and have been carrying out conflict minerals surveys on tantalum, tin, gold, and tungsten (3TG) targeting suppliers since 2016. Starting in 2022, we have also begun conducting a mineral procurement survey for cobalt and mica. Currently, we have established a working group under the Responsible Value Chain Subcommittee overseen by the Executive Officer in charge of legal affairs, in which relevant business units, including those in charge of purchasing, law, and CSR affairs, participate, as well as the Work Standard for mineral procurement surveys to practice responsible procurement of minerals in a comprehensive manner. In addition, training is conducted for members in the working group and staff in the procurement and quality control departments responsible for the survey on the responsible procurement of minerals to improve their understanding of our mineral procurement survey initiatives.

The Brother Group has been carrying out a mineral procurement survey once a year targeting suppliers that supply materials or parts used in the Group's products. In this survey, the Group uses the "Conflict Minerals Reporting Template (CMRT)" as well as "Extended Minerals Reporting Template (EMRT)" provided by the Responsible Minerals Initiative (RMI)^*1 to verify the content of the target minerals, identify smelters or refiners (SOR) in the supply chain of the Brother Group, and confirm the state of efforts made by each supplier toward the responsible procurement of minerals. Based on the information on SORs included in the Brother Group's supply chain identified as a result of the survey and other information, we conduct a risk assessment for each supplier.

Based on the results of risk assessment, we ask suppliers that use SORs expected to be of concern to take appropriate responses, including requiring suppliers to conduct reconfirmation of SOR and avoid use of SORs with concerns.
Furthermore, the Brother Group also requests that suppliers understand the Group's stances through means such as the CSR Procurement Standards and supplier explanatory meetings, and work on responsible procurement activities for minerals.

As a corporate member of RBA and RMI, Brother Group supports the Responsible Minerals Assurance Process (RMAP) audits conducted by RMI, and cooperates with the industry to improve activities regarding mineral procurement surveys, and promotes responsible mineral procurement on a global basis in its supply chain.

Brother Group's commitment to the responsible procurement of minerals is disclosed annually on our website.

The Brother Group carried out the annual mineral procurement survey in 2023 and obtained answers from more than 98% of the targeted suppliers. The Group will make ongoing efforts to obtain answers from all of such suppliers.
The Group also appropriately answered and dealt with inquiries from customers about the conflict minerals survey by means such as the submission of CMRT and EMRT.

• List of Smelters or Refiners [PDF/850KB]

The Brother Group has had its four manufacturing facilities undergo RBA audits, which have been recognized to meet the required standards based on the RBA Code of Conduct (D. Ethics 7. Responsible Sourcing of Minerals).

1. Responsible Minerals Initiative (RMI): An organization that promotes the responsible procurement of minerals globally in cooperation with companies.
2. Conflict-Free Smelter (CFS): Smelter or refinery that has been certified through audit as not using conflict minerals.