Respect for Human Rights within Supply Chains
Sojitz Group is taking action based on the United Nations Guiding Principles on Business and Human Rights.
General trading companies developing businesses around the world can impact the human rights of various stakeholders, both directly and indirectly, through their myriad supply chains.
In the event that a supply chain impinges on the human rights of its stakeholders through environmental pollution, land expropriation, or other means, Sojitz considers such impacts to pose an environmental and human rights risk that greatly impacts the sustainability of the supply chain overall.
For this reason, Sojitz has set “Human Rights” as its first Key Sustainability Issue (materiality), and has made respect for human rights within supply chains a part of its “Sustainability Challenge.” Through making efforts to mitigate environmental and human rights risks, Sojitz seeks to build sustainable supply chains.
|Sojitz Group CSR Action Guidelines for Supply Chains|
|Sojitz Group Human Rights Policy|
＜Spreading Awareness of Sojitz’s Human Rights Policy＞
In Medium-term Management Plan 2023 (FY2020 through FY2023), Sojitz will implement the following measures and awareness-raising initiatives at all Sojitz Group operating companies (183 consolidated subsidiaries, excluding special purpose companies).
(1) Collecting written documents confirming understanding of Sojitz’s human rights policy and relevant issues (currently, 179 documents have been collected from 183 companies for a collection rate of 98%)
(2) Direct dialogue with Group companies
|■9 affiliates in high-risk regions||Dialogues completed in June 2021|
|■19 affiliates in high-risk industries||Dialogues completed in August 2021|
|■155 other affiliates||Dialogues scheduled for FY2021|
In addition, we have informed business partners in high-risk industries about Sojitz Group’s aforementioned policies.
Risk Surveys and Assessments
In high-risk business areas, we are working to strengthen risk management by analyzing structures that tend to cause problems in countries where risk is present and conducting surveys and assessments specific to those risks.
As there are a variety of human rights issues that exist in supply chains, we believe it is important to prioritize our efforts on addressing human rights issues in business sectors where our analysis has revealed that urgent action is needed.
To this end, we approached the previous Medium-term Management Plan 2020 (FY2018 through FY2020) as a preparation period for our Sustainability Challenge. As the first step, we have identified high-risk business industries to prioritize and have conducted surveys and evaluations of the status of measures taken to address risk throughout Sojitz Group and our supply chains, including those of our suppliers.
We have positioned Medium-term Management Plan 2023 as the period of full-scale implementation of our Sustainability Challenge. Based on information obtained through awareness-building activities, dialogues with stakeholders, and from the opinions of third-party experts, we will raise understanding of our policies and of human rights issues while implementing the PDCA cycle for actions taken to address risks. We will also strive to ensure that awareness of risk remains high, and we plan to strengthen our efforts to identify new risks.
＜Approach to Risk Surveys and Assessments＞
We surveyed and confirmed the status of actions taken to address specific risks throughout Sojitz Group and our supply chains in business areas with high environmental and human rights risk, which we identified by referencing an NGO database.
●External Analysis:Analysis of Business Sectors Which Require Strong Human Rights Mitigation Efforts
We use Business & Human Rights Resource Centre’s database to collect examples of manifest environmental and human rights risks in countries worldwide, starting from the year 2000. In this way, we are analyzing which business areas generally carry a high risk.
Risk Evaluation Method based on our analysis, we have prioritized actions for each of our Group companies and business partners.
■Sojitz Group companies (consolidated subsidiaries/affiliates)
As the primary business operator, Sojitz Group assesses risk at all project companies, regardless of country. High-risk businesses are prioritized for assessment.
We assume that even those trading businesses where transactions comprise small amounts or which carry a small profit margin can belong to supply chains where upstream development/production carries a significant impact on the environment and human rights. For this reason, we must assess risk throughout the supply chain, to ensure that Sojitz is not indirectly implicated in any environmental or human rights violations.
Regardless of the size of the business dealings or revenue, we prioritize risk assessment of business partners that fall into high-risk business industries.
●Internal Analysis:Identifying High-Risk Business Areas from among Sojitz Group’s Businesses
We identify high-risk business areas from among Sojitz Group's businesses, and analyze where environmental and social issues are generally prone to occur throughout entire supply chains from upstream to downstream. We then investigate the supply chains of Sojitz Group’s businesses to confirm where those points exist.
Even if Sojitz Group is not directly involved, procurement may indirectly worsen issues upstream where environmental and social problems are likely to occur. We assume that these issues pose a risk and that they are likely to have a significant impact on the sustainability of Sojitz Group’s businesses.
Under Medium-Term Management Plan 2020, we are focusing on conducting risk surveys and developing systematic management methods specific to Sojitz Group’s business areas. Of Sojitz’s approximately 300 consolidated subsidiaries, 59 (including 23 equity-method associates) were in high-risk business fields, so we confirmed the status of their actions taken to address environmental and social issues.
※Locations of environmental and social issues in each business sector
We are continuously making improvements based on our awareness-raising efforts as part of our human rights policy, issues brought to our attention through our dialogue and communication with Group companies and business partners as part of actions taken to evaluate risk in high-risk industries, and the opinions of third-party experts.
●Examples of Initiatives
●Initiatives for Business Partners
Sojitz Group conducts on-site inspections of suppliers and business partners to ascertain the status of specific risk reduction initiatives in the workplace and to communicates with those partners regarding necessary improvements.
In FY2019, Sojitz carried out an on-site survey with an appointed third-party organization to confirm the forest management situation at a wood supplier. In general, it was confirmed that appropriate forest management was being implemented. However, as deficiencies in some biodiversity conservation measures and labor safety measures at logging sites were pointed out, Sojitz requested the supplier to improve them and has been monitoring the progress.
Due to the impact of the COVID-19 pandemic in FY2020, our planned due diligence visits to lumber suppliers have been postponed. However, we continue to exchange information with each supplier. Through questionnaires and other means, we are confirming the status of our suppliers’ measures to address risks and make improvements. For details, refer to our Wood Procurement Policy page.
|Honoring the “Supply Chain CSR Action Guidelines” in our Lumber Business 〜Sojitz Wood Procurement Policy〜|
Sojitz Group will focus its efforts on the following initiatives:
- ・External hotline (Japanese and English available)
- ・Internal hotline (25 languages available)
In addition to the aforementioned hotlines, Sojitz Group is making efforts to raise awareness regarding the importance of improvements and remedial actions taken during Medium-Term Management Plan 2023 throughout the Group and for suppliers in high-risk industries.
Sojitz Group will continue to disclose the results of the aforementioned initiatives and information regarding future measures with a high degree of transparency.