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Supply Chain Management

Policy and Basic Approach

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 human rights in some way, 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 held stakeholder dialogues featuring external experts, as well as internal discussions.

ご参照Stakeholder dialogues

As a result of these activities, in FY2018, we announced the Sustainability Challenge—Sojitz’s long-term vision for the year 2050—which sets out our aim to respect human rights within supply chains. Environmental issues are also often linked to human rights violations against local residents, and we are committed to reducing human rights risks, including environmental issues, in order to realize a society in which the human rights of our stakeholders are respected and so that we can build sustainable supply chains.

Specifically, in terms of specific responses taken by Sojitz Group to address human rights risk, we have established the Sojitz Group Human Rights Policy. Regarding our response to environmental and human rights risks in supply chains, we have established the Sojitz Group CSR Action Guidelines for Supply Chains. We have created these Action Guidelines based on the ten principles of the United Nations Global Compact, and we request that our business partners understand these Action Guidelines and implement them together with Sojitz Group.

Sojitz Group CSR Action Guidelines for Supply Chains

The Sojitz Group CSR Action Guidelines for Supply Chains

The Sojitz Group’s business activities are underpinned by collaboration with business partners in diverse countries and regions as well as within various industries. The Sojitz Group strives to promote CSR initiatives in the supply chain as we conduct our business in this diverse context.

Our Expectations: In order to conduct responsible business, incorporating respect for the human rights of stakeholders and protection of the environment, the Sojitz Group requires suppliers to understand implement the following items as it strives, with them, to do business in harmony with society and the environment.

  1. Respect for the human rights of employees, and treatment of employees in a humane manner.
  2. Prevention of forced labor, child labor, and the observance of appropriate labor hours and minimum wage.
  3. Non-discrimination in hiring and employment.
  4. Respect for employees’ freedom of association and the right to collective bargaining to ensure constructive negotiations between labor and management.
  5. Provision of a safe, sanitary and healthy work environment for employees.
  6. Observance of all relevant laws and regulations, ensuring fair transactions and prevention of corruption.
  7. Ensuring the quality and safety of products and services.
  8. Consideration for ecosystems, the environment, and environmental conservation within our business activities, as well as efforts to prevent environmental pollution.
  9. Timely and appropriate disclosure of information regarding the above items.
Cases of Material Breach

In the event of a material breach of the Action Guidelines, the Sojitz Group shall, upon verifying the facts, request that the supplier or other business partner improve the situation. If no improvement has been made after a specified period, we will take measures which may include a reconsideration of the contract with the supplier or partner.
If necessary, the Sojitz Group shall, along with experts designated by the Group, visit the site concerned for investigation.

Established in April 2010
Amended in June 2017

Related Policies & Initiatives

ご参照Key Sustainability Issues (Materiality)

ご参照Sustainability Challenge: Sojitz's Long-Term Sustainability Vision for 2050

ご参照Sojitz Group Human Rights Policy

ご参照Sojitz Group CSR Action Guidelines for Supply Chains

Human rights issues are diverse, and the risks and necessary responses differ from sector to sector. In addition, these risks and their required responses constantly evolve as the times change. For this reason, under our prior Medium-term Management Plan 2020 (FY2018-FY2020), we first analyzed sectors where human rights issues are likely to occur as well as the risks in those sectors, and confirmed the actions taken by Group companies in response to these risks (see figure below, red outline).

In Medium-term Management Plan 2023 (FY2021-FY2023), we will further strengthen the foundations of our approach, while making Sojitz Group’s policies known both within and outside the Group and ensuring thorough awareness of the issues (see figure below, green frame). In addition, we will implement the PDCA cycle to continuously improve our actions taken in response to risks based on suggestions from external experts and the demands of the times (see figure below, blue frame).

中期経営計画2023(2021年度~2023年度)

Specific Procurement Policies

In addition, we have established procurement policies for individual products that have a significant impact on the social environment.

Wood Procurement Policy

Based on the Sojitz Group CSR Action Guidelines for Supply Chains, we established our Wood Procurement Policy in September 2015 to ensure responsible lumber procurement. In February 2021, we also established quantitative targets for 2025.

ご参照Details and initiatives of the Sojitz Wood Procurement Policy

Palm Oil Procurement Policy

Sojitz established the Palm Oil Procurement Policy in December 2020 to ensure responsible palm oil procurement in accordance with the Sojitz Group CSR Action Guidelines for Supply Chains.

ご参照Sojitz Palm Oil Procurement Policy

Goals and Targets

Group Actions

We have set the following goals in Medium-term Management Plan 2023:

  1. Educate all Group companies about Sojitz’s policies and ensure that they are aware of the relevant issues
  2. Improve the PDCA cycle for addressing high-risk areas

Targets in Individual Policies

Wood Procurement Policy

Based on the achievement of the FY2020 target, we have set a new target for FY2025.

Target for FY2025:

By FY2025, 100% of the wood we handle will be Level A (certified wood) or Level B (wood which has not been certified, but for which we have verified both traceability and suitability of forest management).

ご参照Details and initiatives of our Wood Procurement Policy

Systems

In order to advance sustainability-oriented management and operations, Sojitz has established a Sustainability Committee with the CEO of Sojitz serving as its Committee Chair, as well a dedicated Corporate Sustainability Office.

Sustainability Committee

The Sustainability Committee's activities include establishing company-wide sustainability-related policies and goals, constructing frameworks for their implementation, and monitoring various measures that utilize the ISO 14001 environmental management system standard.

Sustainability Committee Members(Current as of April 1, 2022)

Asterisk (*) indicates a Representative Director

Committee Chair
  • CEO*
  • Members
  • Executive Vice President*
    CFO
    Executive Management of General Accounting, Business Accounting, Finance, IR, Financial Solutions
  • Executive Vice President*,
    Advisor to the President
    Executive Management of Business Group (Automotive, Aerospace & Transportation Project, Infrastructure & Healthcare), and East Asia region
  • Executive Vice President,
    CISO
    Executive Management of Legal, Internal Control Administration, ERP Transition
  • Senior Managing Executive Officer,
    Executive Management of Business Group (Metals, Mineral Resources & Recycling, Chemicals, Consumer Industry & Agriculture Business, Retail & Consumer Service)
  • Managing Executive Officer,
    COO, Human Resources Department, General Affairs & IT Operation Department
  • Executive Officer,
    CCO
    COO, Legal Department, Internal Control Administration Department
  • Executive Officer,
    COO, PR Department, Risk Management Department
  • Executive Officer,
    COO, IR Office
  • Executive Officer,
    COO, Corporate Planning Department, Corporate Sustainability Office, Portfolio Transformation Office
  • Observers
  • Corporate Auditor
  • General Manager, Corporate Planning Dept.
  • Secretariat
  • Corporate Sustainability Office
  • Systems to Promote and Implement Sustainability

    サステナビリティ実行・推進体制

    ご参照Systems for implementing and promoting sustainability

    New Investment Projects

    In addition to examining a project’s business plan, deliberation on all business investments and loans require projects to be analyzed and evaluated for risks to the environment (climate change-related risks) and risks to society (such as the risk of impacting local residents and labor safety-related risks). A project’s value must be confirmed from a sustainability perspective prior to resolution.

    Formation of Forest Eleven Task Force to Ensure Traceability of Lumber and Wood Products

    In 2015, four Sojitz Group companies which handle lumber and wood products formed the Forest Eleven Task Force with Sojitz Corporation taking the lead (currently three companies comprise the task force due to the sale of one company in September 2021). The task force sets goals and conducts activities to ensure proper wood traceability throughout Sojitz Group.

    Initiatives

    Respect for Human Rights within Supply Chains

    Regarding actions taken to respect human rights within supply chains, Sojitz Group is taking action based on the United Nations Guiding Principles on Business and Human Rights.

    Spreading Awareness of Policies and Holding Dialogues

    During Medium-term Management Plan 2023 (FY2021 through FY2023), Sojitz has implemented the following measures and awareness-raising initiatives at all Sojitz Group operating companies (183 consolidated subsidiaries, excluding special purpose companies).

    Sojitz aims to further improve supply chain-related risk management (including suppliers’ supply chains) at Sojitz Group operating companies by holding direct dialogues with companies to raise employee awareness of human rights issues and explain Sojitz’s policies for maintaining respect for human rights within supply chains using educational materials.

    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
      ■129 affiliates outside of high-risk regions
      Dialogues completed in March for FY2022
      ■7 affiliates outside of high-risk industries
      Dialogues scheduled for FY2022

    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. In Medium-term Management Plan 2023, we plan to deepen our PDCA activities for assessing risks, and we will build on this foundation by thoroughly educating employees about Sojitz’s policies and the relevant issues.

    Regarding the PDCA System for Assessing Risks

    Under the supervision of external consultants, we inspect our internal initiatives with a focus on new issues, to ensure that the actions taken throughout Sojitz Group to address risks are sufficient.

    Inspection Method:
    1. Every year, we identify new issues and conduct a comprehensive survey, including of business partners, regarding these issues.
    2. We conduct dialogues and interviews with business divisions and Group companies in high-risk business areas regarding their awareness of and actions taken to address high-risk business, including the newly identified issues.
    3. We conduct human rights due diligence if major problems are found.
    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.

    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.

    Business partners
    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

    Improvements

    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

    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 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.

    Establishing Action Plans for Departments and Offices

    The policies and items resolved by the Sustainability Committee and reported to the Management committee and Board of Directors are made known to employees not only through the company intranet, but also through regularly held briefing sessions with each department, organized by the Sustainability Committee secretariat.
    Items resolved by the Sustainability Committee are established by each department and office at the beginning of the period. These consist of 1) environmental impact of business activities around the world, and an analysis of related laws and regulations; and 2) goal setting and action plans to mitigate these environmental impacts, including those related to climate change. These items are reviewed by each department and office every six months, and the results of these reviews are evaluated by the Sustainability Committee and reported to the Management Committee at the beginning of the following year.

    Sharing the Policy

    In working with Sojitz Group companies and suppliers to reduce environmental and social (human rights) risk, we not only share Sojitz Group's policies and the demands placed on us by international norms like the Guiding Principles on Business and Human Rights; we believe it is important to link these risks to actual business by presenting case studies as well.

    Activities
    1. Human Rights Risk Seminar
      In order to share the newly established Human Rights Policy, we held a Human Rights Risk Seminar in October 2017, focusing on human rights due diligence. A total 78 people attended, comprising Sojitz Corporation COOs/General Managers and the presidents of 14 Sojitz Group companies.
      The seminar aimed to foster awareness of human rights issues, to inspire greater efforts to address human rights in the future. We shared information on global trends, such as how human rights due diligence has become more and more of a factor in determining business competitiveness around the world following the advent of the United Nations Guiding Principles on Business and Human Rights, as well as explained how alongside the growth of ESG investment, a company's decision to conduct human rights due diligence has become another indicator by which investors assess corporate sustainability.
    2. e-learning
      We regularly conduct e-learning on changes in social trends related to sustainability and the response to environmental and human rights issues required of companies today, in order to foster understanding of sustainability within Sojitz Group. Around 5,000 Sojitz Group members* worldwide take these e-learnings each time they are made available.
      * Employees and officers at Sojitz Corporation, the nine most important Sojitz Group companies, and Sojitz Corporation overseas subsidiaries
    3. Publishing The Sojitz Group Sustainability Handbook
      In an effort to build understanding of sustainability within Sojitz Group, we published The Sojitz Group Sustainability Handbook. This handbook provides a summary of Sojitz Group's sustainability-oriented policies and goals, sustainability-related basic information and information about the external environment such as international standards, and concrete, real examples of risks in business and how these risks were addressed.

    Performance

    Spreading Awareness of Policies and Holding Dialogues

    In Medium-term Management Plan 2023 (FY2021 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
      ■129 affiliates outside of high-risk regions
      Dialogues completed in March 2022
      ■7 affiliates outside of high-risk industries
      Dialogues scheduled for FY2022
    (We detected no major problems in the dialogues and interviews conducted in FY2021, as well as in the supplier surveys.)

    Confirming New Issues

    Every year, we identify new issues and conduct a comprehensive survey, including of business partners, regarding these issues. In FY2021, we identified the following issues: respect for human rights in specified regions, technical trainees from overseas, and leaks of customer information. We then conducted surveys and confirmed the status of these issues throughout Sojitz Group.

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