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Respect for Human Rights within Supply Chains

Sojitz Group is taking action based on the United Nations Guiding Principles on Business and Human Rights.

Respect for Human Rights within Supply Chains

Policy Commitments

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, such as by causing environmental pollution or through land expropriation, Sojitz considers this an environmental and human rights risk that immensely 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
Sustainability Challenge

There are a variety of human rights issues that can occur within supply chains, and we consider it important to analyze business sectors which require particularly strong efforts to mitigate risks. We then assign priorities for dealing with them in order to tackle supply chain risk in a more systematic way.

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.

Initiatives in Medium-Term Management Plan 2020

In FY2020, 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.

Respect for Human Rights within Supply Chains

We will also share the status of our internal activities taken to address risks and listen to opinions of external experts. (For details on how inadequate risk responses have been addressed, please refer to Planned Initiatives in Medium-Term Management Plan 2023 below.

●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.

Based on this analysis, we decide priority as follows for each Sojitz Group company and supply chain (for trading-based businesses).

■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.

■Suppliers (Trading-based businesses)
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.

We prioritize assessment for suppliers in high-risk segments regardless of the scale of the transactions or profit margins.

●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.

※Locations of environmental and social issues in each business sector

Respect for Human Rights within Supply Chains

Planned Initiatives in Medium-Term Management Plan 2023

In order to further strengthen our risk management foundation for high-risk business areas established in Medium-Term Management Plan 2020, in Medium-Term Management Plan 2023 we will develop a PDCA system for the environment, human rights, resources, and human resources (labor)—important areas of focus under the UN’s SDGs as well as in Sojitz Group’s Key Sustainability Issues—in business areas that have a large impact on the human rights of stakeholders. We will also work to disseminate and thoroughly promote understanding of the issues contained in the Sojitz Group Human Rights Policy.

■Spread awareness of human rights issues contained in the Sojitz Group Human Rights Policy

  • We will hold dialogues with all domestic and overseas Sojitz Group companies to ensure thorough understanding of the issues throughout Sojitz Group.
  • We will continue to conduct activities to raise awareness regarding human rights issues listed in the Sojitz Group Human Rights Policy targeted for suppliers in sectors of concern.

    ■Strengthen the foundation for high-risk areas established in Medium-Term Management Plan 2020

  • In business areas with high environmental and human rights risk, Sojitz Group will listen to third-party opinions on the status of the Group’s actions taken to address specific risks, and improve our initiatives using the PDCA cycle.
  • We will continuously share the results of our PDCA-based improvements throughout Sojitz Group.

Improvements/Remedial Action

Actions Taken during Medium-Term Management Plan 2020

At Sojitz Group, to grasp the concrete measures in place for reducing risk in our work environments and to deepen communication with management, employees, and on-site supervisors with regards to further improvements, we conduct on-site inspections of companies that complete the CSR survey.

In June 2018, the Corporate Sustainability Office visited Kyodo Sojitz Feed Co., Ltd. ("KSF") in Vietnam, together with an outside specialist. KSF is a consolidated subsidiary which mainly produces and sells feed for raising pigs and chickens. Demand for meat in Vietnam is expected to continue to rise, and KSF is one of the companies contributing to the stable supply of reliable and safe food resources in the country.

The two-day, on-site inspection included discussions on sustainability with the company's management, and regarding the six focus areas* put forth in the Sojitz Group CSR Action Guidelines for Supply Chains, we were able to confirm the availability of various documentation, as well as initiatives at factories and facilities on company grounds.

KSF received an overall high rating from the outside specialist, including for its good labor management and preparation of documentation, and management quality improvement initiatives through acquisition of the GLOBALG.A.P. Certification, which certifies the environmental, social, and economic sustainability of an agricultural production business. However, the inspection resulted in the finding of a potential human rights risk in the category of "Safety and Sanitation in the Workplace" in one area of the factory. We will share this feedback in the post-inspection summary, which covers management, and will prioritize making improvements in this area.

Focus Area(※) Results of Inspection
Human Rights and Labor Minor findings
Safety and Sanitation in the Workplace Determined areas under consideration for improvement
Environmental Conservation Minor findings
Anti-Corruption Measures and Fair Trade No issues
Quality and Safety Control for Products and Services No issues
Disclosure of Information No issues

●Initiatives for Suppliers

At Sojitz Group, in order to grasp the concrete measures in place for reducing risk in work environments, we conduct on-site inspections and communicate with suppliers regarding further 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.

Planned Initiatives in Medium-Term Management Plan 2023

Sojitz Group will focus its efforts on the following initiatives:

  • Sojitz Group currently has both internal and outside hotlines in order to directly receive crucial information from impacted parties that we then use to implement improvements and provide remedies.
  • In addition to these hotlines, Sojitz Group will conduct activities to raise awareness throughout Sojitz Group and for suppliers in high-risk industries regarding the importance of making improvements and providing remedies in Medium-Term Management Plan 2023.

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