Procurement Basic Policy

(Benesse Corporation)

■ Benesse Corporation conducts its business activities based on its corporate philosophy (Benesse = Well-Being), code of conduct, human rights policy, and environmental policy. We will work together with our partner companies to build a supply chain that can provide safe, secure, and high-quality products and services.

■ Benesse Corporation is always mindful of the far-reaching impact of its business activities and promotes socially responsible management. Together with our partner companies, we will thoroughly comply with international laws and guidelines and conduct ourselves ethically.

1. We promote fair and equitable procurement practices.
2. We will continue to provide products that prioritize safety and security.
3. We are committed to thorough information management and security throughout our supply chain.
4. We constantly strive to provide products and services that exceed our customers' expectations.
5. We strive to build supply chains that reduce environmental impact, act in accordance with human rights, and prioritize occupational safety and health.
6. We build partnerships based on trust, enabling us to grow and develop together.

Supply Chain Management Promotion System

(Benesse Corporation)

Area of responsibility for supply chain management

At Benesse Corporation, the Operations Transformation Division is responsible for building the entire supply chain necessary for providing and selling products and services, from raw material and component procurement to manufacturing, inventory management, and distribution.

Promotion system

The initiative is being promoted primarily by the Operations Transformation Headquarters, the department in charge, based on Benesse Corporation's "Purchasing Management Regulations" and "Authority Regulations."

●“Purchasing Management Regulations”

This document outlines the fundamentals of all purchasing operations at Benesse Corporation, including supplier management and purchasing procedures, aiming to ensure accurate and fair management and operation, thereby promoting improved management efficiency.

● "Authority Regulations"

The following matters are decided through approval based on the authority regulations:

• Company-wide policies regarding material procurement, manufacturing outsourcing, distribution, and inventory management.
• Purchase categories and methods in transactions
• Purchasing suppliers, terms of trade, prices, etc.

Audit from a social and ethical standpoint

Benesse Corporation manufactures its products at contract manufacturing plants.
The main countries where our overseas contract manufacturing plants are located are China and Vietnam.
Through regular audits, we verify the environmental and labor practices at our contract manufacturing plants and request their respect for sustainable procurement practices.

Stakeholder engagement with business partners

In the social and ethical audits conducted within Benesse Corporation's supply chain, the top priority is to verify the absence of inhumane treatment, including child labor, abuse, and harassment, which are critical issues in human rights due diligence. Benesse also promotes awareness of its human rights policy and encourages respect for human rights. Since 2022, Benesse has held annual meetings with managers from its production plants in China to explain the importance of building a sound supply chain at production sites, including the aforementioned critical issues and environmental considerations, and to exchange opinions. Regular meetings to exchange opinions with all manufacturers are planned to continue. Similar exchanges of opinions are also conducted at domestic factories.

Through these stakeholder engagements, if areas for improvement are identified, we work with our production plants to implement those improvements. To date, we have made the following improvements:

• Inspection and installation of emergency lights
• Clear indication of evacuation routes
• Wearing a special mask
• Implementation of additional health checkups
• Leveling production through planned ordering, etc.

Main initiatives

(Benesse Corporation)

Fair and equitable procurement transactions

Our risk management and compliance regulations stipulate "compliance with laws and regulations concerning fair trade and fair competition," and we ensure fairness and impartiality through transactions based on Benesse Corporation's "Purchasing Management Regulations" and "SCM Area Purchasing Management Guidelines."

Safety and security are our top priorities.

Based on Benesse Corporation's "Product Safety Policy," we have established procurement standards for paper and raw materials for educational materials and toys, as well as product safety standards in manufacturing. In particular, we strictly prohibit the use of materials with environmental impacts and have established an inspection system.

● Benesse Corporation's commitment to product safety

Five activities to ensure safety and security

1. We will ensure we have a thorough understanding of the raw materials used.
2. We restrict substances that are harmful to the environment and human health.
3. We will imagine the usage scenarios and strive to prevent accidents.
4. We also conduct third-party checks.
5. Benesse Corporation and its affiliated companies will work together to implement improvements.

Thorough information management

To ensure that our contractors can safely carry out their work, we thoroughly manage the information they handle in accordance with Benesse Corporation's "Personal Information Protection Policy" and "Guidelines for Managing Personal Information of Contractors." In addition, we conduct "contractor audits" once a year as an important process to check the status of information management at contracted companies, identify issues, and make improvements.

• Regarding our efforts to protect personal information

Reducing environmental impact

Based on the Benesse Group's environmental policy, we are consistently working from a procurement and logistics perspective to ensure an environmentally conscious supply chain at every stage. We promote activities such as minimizing waste in product specifications, promoting environmentally conscious procurement, and improving the accuracy of production numbers. We also collaborate with our business partners on initiatives such as evaluating environmental efforts and developing efficient delivery methods.
At the Benesse Logistics Center, our main logistics hub, we are working on CO2 reduction activities.

Respect for human rights and consideration for occupational safety and health.

● The Benesse Group has declared its support for the United Nations Global Compact.

• We regularly conduct factory audits, primarily with our overseas suppliers, based on the principles of the Global Compact.
• We hold supplier meetings with the factories that produce educational toys to promote understanding and implementation of our policies.

● We conduct "human rights assessments" based on the Benesse Group's human rights policy.

• We continuously verify that each employee involved in procurement operations respects human rights and carries out their daily work in a sound manner.

●As a voluntary initiative toward realizing sustainable logistics, we endorse the principles of the "White Logistics" promotion movement advocated by the Ministry of Land, Infrastructure, Transport and Tourism, the Ministry of Economy, Trade and Industry, and the Ministry of Agriculture, Forestry and Fisheries, and have submitted a declaration of voluntary action to the "White Logistics" Promotion Movement Secretariat.

• White Logistics Voluntary Action Declaration

Partnerships with business partners

To build strong and sustainable partnerships through mutual prosperity across the entire supply chain, creation of new value, and desirable trading practices with subcontractors, we have issued a "Partnership Building Declaration."

• Declaration of Partnership Building