Procurement InitiativesOur Company / Procurement

Explanation of Our Procurement Policy

• Positioning of the Policy for Suppliers
  Our O&M Engineering divisions aim to address global energy challenges by ensuring a stable supply (Stability), providing affordable electricity and services (Affordability), and driving the transition to a decarbonized society (Sustainability).
  In alignment with our company-wide commitment to building partnerships, we promote mutually beneficial relationships across the supply chain through internal employee education, external announcements via our official website, and ongoing engagement with business partners and suppliers.
  Additionally, the Procurement Planning Group has established a Procurement Policy to uphold universal values such as safety and fairness in material transactions. This policy is designed to foster partnerships with suppliers who demonstrate the capacity to balance stable supply with cost efficiency, thus ensuring business continuity.
• Supply Chain Management in Procurement
  Our procurement activities prioritize quality, cost, delivery timelines, supply stability, and reliability. Simultaneously, we implement ESG-based supply chain management by addressing key issues such as environmental sustainability, human rights, and governance in collaboration with strategic partners representing significant transaction volumes.
  From an ESG perspective, we evaluate sector- and product-specific risks—such as supply chain structure, labor conditions, energy consumption, resource intensity, emissions, pollution potential, etc.)—using external risk management tools before initiating transactions. We also conduct periodic assessments of our partners’ ESG initiatives through various evaluation mechanisms to ensure continuous risk management.

Sharing Our Policy(For Partner Development and Training Purposes)

• Procurement Policy Trainings
  We host procurement policy briefings each year to communicate current procurement practices and foster a deeper understanding of JERA's future goals. These trainings provide a platform for shared learning and growth between us and our suppliers as a place to discuss a range of topics, such as procurement policies and decarbonization, in our initiatives to enhance mutual ESG performance. They also encourage suppliers to independently advance improvements in environmental sustainability, safety, and human rights. JERA also facilitates discussions and shares insights on pressing global issues, such as environmental challenges and human rights violations, addressing practical concerns as necessary.

Training Participating Partners(FY 2024 Result)

Examples of Specific ESG Initiatives

• Supply Chain Assessments
  In FY2023, we launched supply chain assessments (SC assessments) targeting key partner that account for the top 67.6% of transaction value in the previous fiscal year. The primary objective of these assessments is to ensure transaction integrity for strengthening partnerships in material procurement. The SC assessment process involves internal self-assessments by the procurement team and external assessments by domestic and international partners. Through these assessments, we aim to monitor and support the ESG initiatives of our suppliers.

Reference: SC Assessment Results

* Significant Suppliers are suppliers that account for the top 67.6% of transaction value in the previous fiscal year.

• Nine Key Focus Areas in Our Procurement (SC Assessment Items)
  Drawing on the JEITA’s “Responsible Business Conduct Guidelines,” which are widely adopted in Japan’s electric power sector, we identified 26 questions across nine key focus areas. These focus areas are mapped against the time horizon (short-, medium-, long-term) and scope (company-specific, regional, global) of supply chain risks.

Source: Compiled using sources such as “FY2021 International Economic Survey on Internal and External Economic Growth Strategy Development (Survey on the Visualization of the Global Supply Chain),” published by the Ministry of Economy, Trade and Industry.

Reference: Assessment Items

Assessment Results and Evaluation Standards

We evaluate supplier responses across nine key areas using a three-tier scale (low-, medium-, and high-risk) and engage with medium- and high-risk suppliers to implement a risk mitigation cycle.

If violations of our environmental or social policies are identified, we request corrective actions, conduct on-site inspections where necessary, and provide improvement support, with reassessments conducted in the subsequent fiscal year to track progress.

If corrective actions are not implemented within 12 months notwithstanding ongoing requests, we will consider additional measures, including a review of the feasibility of continuing the partnership（e.g., suspension of business）.

Reference: Risk Reduction Targets

Reference: Risk Mitigation Cycle Through Engagement with High-Risk Partners

• FY2023 External Assessment Results and Responses
  In FY2023, external assessments identified 4 out of 21 targeted companies (19%) as medium- or high-risk, necessitating corrective measures. Conversely, 17 companies (81%) were assessed as low-risk, with no corrective action required.

Reference: Progress on Improvement Support Initiatives Based on FY2023 Assessment Results

For the one high-risk company and three medium-risk companies, support for corrective measures was provided as part of corrective action plans.

In the FY2023 assessment, certain suppliers were identified as high-risk; however, the FY2024 reassessment confirmed that they had appropriately implemented the required corrective actions. Accordingly, their evaluations were updated to low-risk. A company-wide assessment, covering not only low-risk but also medium-risk suppliers, is scheduled to be conducted in FY2026.