We conduct fair transactions with suppliers and build stronger mutual trust with them as partners who can grow with us.

Promotion of CSR Procurement

Initiatives down the entire supply chain are essential for a company to fulfill its social responsibilities through business activities. We share our thoughts with our suppliers globally and promote initiatives for themes such as human rights, health and safety, environment, quality, and social contributions.

Obayashi Group CSR Procurement Policy

The Obayashi Group established the Obayashi Group CSR Procurement Guidelines in June 2011 as part of our effort to fulfill our corporate social mission as based on the Obayashi Basic Principles. Since then, we have been working to practice CSR procurement in league with our wide range of suppliers and other partners.

In March 2020, we revised the guidelines to include more concrete items based on society's various needs and named the new document the Obayashi Group CSR Procurement Policy. The most important points are stipulated in contracts concluded with suppliers and confirmed when the contracts are agreed.

The Obayashi Group is making suppliers and subcontractors aware of the revised Obayashi Group CSR Procurement Policy. We are managing our supply chain by giving questionnares which evaluate their understandings, so that suppliers of all products and services connected with our business can grow and develop with us.

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Implementation of education and training

The Obayashi Group conducts training every fiscal year with the aim of sharing and spreading CSR procurement, which is essential for conducting "responsible supply chain management" as stated in the ESG initiatives, throughout the Group.

Past education and training

Date of implementation Contents of training Subjects
December, 2021 E-learning on overall CSR procurement All employees of Obayashi and domestic group companies
December, 2021 Training on supply chain management by an external charge of procurement operations external instructor Personnel in charge of procurement operations at Obayashi and domestic group companies
December, 2022 E-learning on human rights issues, mainly on the subject of foreign technical intern trainees All employees of Obayashi and domestic group companies

CSR Procurement Questionnaires

Obayashi conducts questionnaires across the supply chain every fiscal year to confirm the widespread awareness and acceptance of the Obayashi Group CSR Procurement Guidelines, and the degree of compliance. In FY2022, the survey covered approximately 1,450 companies, including members of the Obayashi Rin-yu-kai and companies that conduct regular business with the Group (response rate: 89.0%). We intend to share opinions and promote CSR procurement initiatives based on the survey results.

Proportion of Procurement from Survey Respondents in Total Procurement in Japan

Traceability Survey

In response to the growing social concern surrounding human rights violations, environmental destruction, and other issues in supply chains, we started conducting traceability surveys in FY2021 on wood products and solar panel components that are procured overseas and are thought to carry a high degree of human rights risk. The survey broadly confirmed the traceability of products in both areas and no risk of human rights violations or environmental destruction was detected at the time. We will conduct regular surveys to maintain a clear understanding of the latest situation and also encourage deeper understanding of the CSR Procurement Guidelines among suppliers and subcontractors.

Survey on the Reception of Foreign Technical Intern Trainees

Potential human rights violations against foreign technical intern trainees have been pinpointed as a social concern, so Obayashi conducted a questionnaire on how foreign technical intern trainees are being accepted at relevant suppliers and subcontractors. Interviews and discussions were conducted with five suppliers and subcontractors based on the survey results.

The survey did not reveal any obvious human rights violations, but it did highlight some areas for improvement. We will continue to conduct surveys and consult on potential improvements.

Survey on the current status of respect for human rights in overseas offices and group companies

To promote respect for human rights in our overseas operations in addition to our domestic operations, in FY 2022 we conducted a questionnaire survey of our overseas offices and overseas group companies on their efforts to respect for human rights.

The survey asked whether or not human rights training and education were provided, and whether or not language considerations were made for foreign national employees and foreign workers at construction sites.

The survey results showed that all business sites and group companies regularly provide training and education, and some offices even provide such training and education to their suppliers. We also confirmed that foreign employees communicate in languages they can understand, and that safety signs and precautions on construction sites are translated, posted, and explained to foreign workers in languages they can understand.

Scope of the Survey: Asia-Pacific Regional Headquarters, the offices and Group companies under their control, North American Regional Headquarters, offices and group companies under the control of the North American Regional Headquarters, and group companies under the control of the Real Estate Development Division (19 offices in total)

Engaging with Suppliers and Subcontractors

Every year, Obayashi holds a meeting with Obayashi Rin-yu-kai member companies to discuss a wide range of issues that encompass quality, safety, and environmental consideration, as well as how to reform work styles, improve productivity, and secure workers.

Any useful opinions or examples shared during the discussion are applied across the entire Company and incorporated into subsequent activities. Every six months, suppliers and subcontractors are evaluated on a five-level scale based on seven factors, including quality, safety, and environmental consideration. Each participating company is individually notified of the evaluation results, guidance is provided in the form of interviews and other means to spur improvements, and awards are presented to excellent suppliers and subcontractors.

Obayashi seeks to raise awareness of CSR procurement among its suppliers and subcontractors through effective engagement, and to build beneficial partnerships. and subcontractors.

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Obayashi Rin-yu-kai

Obayashi Rin-yu-kai, comprised of Obayashi suppliers and subcontractors from across Japan, counts about 1,100 member companies doing various types of work and industries, who are positioned as valuable stakeholders of the Company. Obayashi periodically monitors member companies to ensure their soundness.

Obayashi Rin-yu-kai holds liaison meetings regularly. Participants share information about revisions to safety laws and hosting foreign technical trainees. We strive to improve communication through listening sessions and other means, and are building a relationship of trust.

Percentage of products and services procured in Japan from Obayashi Rin-yu-kai members and from other companies, by value

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Support for Various Educational and Training Sessions

A scene from safety training

We are working with suppliers to improve safety and health, through such methods as safety patrols and safety and health training sessions. We provide support to develop and enhance management systems, with the aim of improving suppliers' autonomous safety and health management abilities.

We also support suppliers in other ways by providing information and training seminars for supplier management teams on subjects ranging from health and safety to regulatory compliance.

Moreover, each construction work office has a foremen's association consisting of suppliers. Matters concerning safety, desired improvements in the workplace environment, and other topics are discussed at foremen's association meetings, and the contents of those discussions are passed on to Obayashi for discussion of improvements.
We have also established a reporting system for employees of suppliers using the Obayashi Group Corporate Ethics Reporting System. This system enables them to use anonymous hotlines (internal and external) to report forced labor or child labor, and other improper acts by Obayashi Group employees at construction sites and elsewhere that lead to legal violations, if such an event occurs. Individual reporters and the companies of individual reporters will not be subjected to unfair treatment under this system.

Establishing the Business and Skills Transfer Support Center

The business continuity of specialized construction companies has become a challenge for the industry, due to the aging of skilled workers and the lack of successors to take over the management of such companies. Obayashi Rin-yu-kai member companies, which are important Obayashi stakeholders, face similar problems, so, in April 2023, Obayashi opened the Business and Skills Transfer Support Center to help solve these management issues and provide the necessary support.

The center has set up a consultation desk for individual companies to discuss business succession (M&A, internal successor training), talent recruitment, human resource development and retention, the use of IT, and other issues, and receive individualized support from specialist consultants. Obayashi will also provide educational opportunities by holding training sessions for management and employees and streaming e-learning programs.

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Initiatives to Secure Human Resources

In recent years, the construction industry has been confronted with the problem of a shortage of skilled workers. This is due to the aging workforce and a decline in younger recruits and retention rates. To solve this problem, we are working to develop skilled construction workers and secure human resources by promoting enrollment in social insurance, addressing problems with such as improving the stratified subcontracting structure, and other means. In confornity with the Japan Federation of Construction Contractors' statement for respecting fair labor cost estimation, we reference the unit labor costs specified by the Japanese government in determining contract amounts with subcontractors and provide guidance that will facilitate payment of fair wages that include legal welfare expenses.

Obayashi Rin-yu-kai Vocational School

Learning to assemble scaffolding by doing the actual work
The work of securing a load to the crane when lifting loads with a crane

In 2014, we opened a vocational training school(*2) to nurture skilled workers at our suppliers and subcontractors and pass on expert skills to future generations. The school offers three courses (in scaffolding, ferro-concrete reinforcement, and formwork) as well as a short course that focuses on Computer-Assisted Design (CAD). Employees of Obayashi and its suppliers and subcontractors serve as instructors. Through this training, trainees acquire the knowledge and technical skills needed at construction sites. These include construction tasks, safety management, and CAD.

In March 2023, the school set up a new O-DX Room and started offering training on crane slinging* operations using virtual reality (VR) tools. Going forward, the school will enhance its training programs so that workers can acquire a more diverse range of skills. The school will also strive to contribute to securing more workers.

Additionally, we have an incentive system for graduates with certain certifications who work on our construction sites. The program gives financial incentives and rewards both to the graduate and the supplier or subcontractor. This helps workers shape their careers and increases their wages.

*2 This school is certified by the Tokyo metropolitan government to implement a Ministry of Health, Labour and Welfare program as a regional organization conducting occupational training. Employees from Obayashi and our suppliers serve as lecturers, enhancing the skills of younger workers

Developing Multiskilled Workers

We develop multiskilled and semi-multiskilled workers to deal with the shortage of skilled workers, make work more efficient while saving labor, and stabilize business for our subcontractors. We set up a framework joint venture consisting of scaffolding, ferro-concrete reinforcement, and formwork subcontractors. Under the instruction of Obayashi retirees, subcontractors teach each other skills as they work. In addition, we send subcontractor personnel of supervisor class to Obayashi construction sites to gain experience in site construction management duties. The plan is to use them to manage a multiskilled worker organization.

Going forward, we plan to expand the types of work covered in this program and expand it to all branches.

Subcontractors Teach Each Other Different Types of Work to Produce Multiskilled Workers

Certification Programs (Excellent Site Supervisor, Excellent Operator)

Excellent site supervisor and excellent operator ceremony

We introduced "Obayashi Excellent Site Supervisor Certification Program" aiming to raise the motivation of young skilled workers.
Under the system, we began certifying and raising the pay of particularly exceptional supervisors.
We have been working to increase the scope of the system. The number of applicable occupational categories and the eligible age limit was expanded. Now we provide 25 categories for skilled workers up to 65 years old.
Recognizing the growing importance of crane operators, we have also launched a similar program, "Obayashi Excellent Operator Certification Program" in the fiscal year ended March 31, 2017, offering certification and higher pay for outstanding crane operators.We encourage self-awareness among supervisory foreman and hold regular networking sessions for supervisory foremen to heighten awareness and strengthen ties among the foremen.
Networking sessions include lectures on safety, presentations by Construction Work Office managers on expectations and wishes, plus opinion exchanges on topics concerning improving efficiency and other matters, such as the five-day work week and creative ways to improve retention of young skilled workers.

Supporting Recruiting Activities

Promoting recruitment of skilled workers who will lead future generations and passing on techniques is not just up to suppliers. It is a matter in which Obayashi can play an important role. We work together with our suppliers to convey the appeal of the construction industry. Since FY2015.3, we have been holding company introduction seminars jointly with Obayashi Rin-yu-kai. These events are open to high school career counselors.

We also hold hands-on occupational construction site tours for high school and vocational school students. Students get hands-on experience in multiple areas, including rebar, gas pressure welding, plastering, and painting. This way, they can learn the differences between various kinds of work and get a sense of their own aptitudes. Another objective is to let them imagine themselves working in construction.

A high school student learning how to use a gas burner

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Health and Safety

We work to create workplace conditions not only pleasant for diverse personnel, including young, old and female construction skilled workers, but also attractive to young people considering a career in construction.

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Green Procurement

We have established "Obayashi Green Procurement Guideline (Available only in Japanese)" to promote more environmental friendly procurement. Also, for construction materials, we hold material inspections at factories to verify that the quality of material we use is under the legal standards.

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