Basic Policy

Sumitomo Forestry regards sustainable procurement in the housing business as one of its material issues for management. For the structural materials and hagarazai* procured through the Timber and Building Materials Division, we confirm their legality and sustainability. In addition, we have been taking measures to comply with the Clean Wood Act, which was enforced in May 2017 to promote the distribution and utilization of legally harvested wood and related products in Japan. The Housing Division was registered as a Type 2 Registered Timber-Related Operator under the Clean Wood Act in March 2018. We are procuring housing equipment, heat insulation materials, resin parts and other building materials in accordance with the Sumitomo Forestry Group Green Procurement Guidelines.

*Structural materials are wooden materials used for the foundation, posts and beams of a wooden house. Hagarazai are supplementary materials for the structural materials of a wooden house, such as base materials.

Green Procurement and Sustainable Procurement

The Sumitomo Forestry Group formulated the Green Procurement Guidelines in 2002 to set its product procurement standards from two perspectives: suppliers’ commitment to the environment and social issues(evaluation of their corporate activities) and the impact of suppliers’ products on the environment throughout their life cycles (evaluation of their products).

In 2013 and again in 2020, the Group revised the Green Procurement Guidelines to add the items to check the status of suppliers’ sustainability initiatives more broadly from the perspective of “evaluation of corporate activities,” including those on occupational health and safety and respect for human rights.

Communication with Our Procurement Partners

Sumitomo Forestry has construction sites in every region of the country, and we rely on support from many business partners in the housing business. We consider communication with these companies to be vital in order to share with them our philosophy of improving the quality of homes while protecting the environment.

Business Partner Evaluation

In the housing business, we evaluate the suppliers of materials (on-site equipment manufacturers, precut factories, building materials suppliers and others, excluding frame centers) every year per type of material. Specifically, we evaluate the items, such as the supplier’s corporate profile, product quality, cost, delivery period, environmental response and services. We provide feedback from the evaluation results as a way of bettering our procurement activities. In fiscal 2025, we provided feedback to 207 suppliers and recorded a 100% implementation rate. Also, as part of our evaluation process, we have been auditing the factories of our suppliers on a regular basis. Constructing a building without ensuring the quality of materials used in it would pose various risks to the building and their users. Based on this recognition, we audit the suppliers’ factories with a focus on their quality management and check whether or not the materials we procure from them are manufactured to meet our quality requirements.

Sustainability Procurement Survey

Starting in fiscal 2019, the Housing Division began conducting the annual Sustainability Procurement Survey on existing suppliers, including manufacturers of building materials and housing equipment, in addition to the Green Procurement Survey that has been conducted on new suppliers. Through this survey consisting of 53 questions, we confirm the progress of each supplier's governance, social, and environmental initiatives,as well as the sustainability of their wood procurement.
Particularly regarding climate-related matters, we engage with our suppliers by reviewing their actual greenhouse gas emission figures and, where reduction plans have been formulated, the specific details of such plans, with the aim of achieving carbon neutrality across our Group by 2050.

In fiscal 2019, the division conducted the survey on 42 companies (86% of the targeted manufacturers on the basis of our total purchase amount from the suppliers in the previous fiscal year). The scope of the survey was gradually expanded, and in fiscal 2025, the division surveyed 89 suppliers (98.2% of the targeted manufacturers on the basis of our total purchase amount from them in the previous fiscal year).
In August 2025, a video of the Sustainability Procurement Survey briefing session was made accessible to participants in the survey before and during the survey period. Through the video, we shared the Sumitomo Forestry Group Code of Conduct, the Sumitomo Forestry Group Procurement Policy, and other ideas regarding responsible procurement to promote mutual understanding.

The survey response rate was 100% as it was in fiscal 2024. Based on the results of the survey, feedback was provided to all targeted suppliers. At the same time, in order to promote each company's initiatives, the following steps were taken and the related details were recorded: (1) If a company did not respond to a "high-risk" issue, a detailed interview was conducted to ask the company about its future initiatives; (2) If a company's initiatives were falling behind compared to the previous fiscal year, the company was interviewed and encouraged to make improvements.

Through the surveys, we were able to confirm that many of our suppliers share our understanding of what responsible procurement means. On the other hand, some suppliers fell short of our expectations, and after discussions at our supplier evaluation meetings, we gave feedback to such suppliers. We will continue to conduct this follow-up activity for ongoing improvement.

Sustainability procurement survey implementation rate in the supply chain of the domestic housing department (%)*

98.2%

*Based on the previous fiscal year's purchases by the target manufacturer

Initiatives for the Sustainability of Timber and Wood Products in the Housing Business

There is increasing concern about deforestation as a cause of climate change. Especially for wood used in houses as outlined in the Sumitomo Forestry Group Procurement Policy, the Housing Division puts sustainable wood procurement into practice, including confirming the legality of procured products and complying with the rules on human rights, occupational health and safety and biodiversity conservation, while giving consideration to local communities.