Supply Chain CSR

Overview of Efforts to Promote CSR within the Supply Chain

Working with Sojitz Group companies and suppliers to reduce environmental and social (human rights) risks within our diverse supply chains has been an important issue for Sojitz Group, as our global business development brings us in to contact with supply chains covering a wide variety of industries.

As shown in the diagram below, we aim to achieve more sophisticated risk management within our supply chains and gradually expand the scope of this risk management through joint efforts with Group companies and suppliers.

Policy

In April 2010, we created the Sojitz Group CSR Action Guidelines for Supply Chains based on the ten principles of the United Nations Global Compact. We share these guidelines with our suppliers and require them to develop climate change countermeasures; initiatives for effective use of water, waste materials and other resources; measures to protect biodiversity; and response to human rights violations, in order to conduct business in harmony with society and the environment. Striving to further honor the CSR Focus Area of “Respect the human rights of people involved in our businesses,” we revised these Action Guidelines in June 2017.

Furthermore, in September 2015, we established a wood procurement policy. This policy, drafted through consultation with WWF Japan, embodies our Supply Chain CSR Guidelines within the context of our wood-related businesses.

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

 

Click here to view the Sojitz Group Human Rights Policy.

Sharing the Policy

For Sojitz Group companies and suppliers to mitigate environmental and social (human rights) risks within their supply chains, they need to do more than simply meet international norms and standards like the UN Guiding Principles on Business and Human Rights; we believe that it is vital they better understand Sojitz’s policy through recent, factual environmental and social (human rights) risk case studies which illustrate how matters potentially develop into business risks.

Activities in FY2017

In FY2017, we focused on establishing the Sojitz Group Human Rights Policy, revising the CSR Action Guidelines for Supply Chains, and sharing the Human Rights Policy with Sojitz Group companies and suppliers.

■Highlights

(1) Human Rights Risk Seminar
For the first phase of our work to share the newly established Human Rights Policy throughout Sojitz Group, 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 how human rights due diligence is becoming more and more of a factor in determining business competitiveness around the world, and we 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
Every year, we provide Sojitz Group members* both in Japan and overseas with an e-learning program to foster understanding of sustainability within Sojitz Group.

* Employees and management of Sojitz Corporation, employees and management of 9 major Sojitz Group companies, and employees at overseas subsidiaries.

The second phase of our efforts to share the Sojitz Group Human Rights Policy during FY2017 involved a lecture for approximately 5,000 people, on the topic of human rights due diligence. We also required suppliers to read the Supply Chain CSR Handbook (see below) prior to taking the course, utilizing this opportunity to single out which suppliers to focus on starting from FY2018 and ready them for their human rights due diligence.

E-Learning from FY2015 – FY2017

Year
Topic
Participants
FY2015
Environmental & Social Risk
within the Supply Chain
5,020
FY2016
To Remain a Corporate Group Creating
“Two Types of Value”
4,718
FY2017
Response to Human Rights Risks
5,192

 

(3) Publishing the Supply Chain CSR Handbook
The third phase of our FY2017 work to share the Human Rights Policy was to publish the Sojitz Group Supply Chain CSR Handbook. Provided mainly to Group companies and suppliers overseas, the handbook shares Sojitz’s environmental and human rights policies, basic explanations of CSR, and concrete, real examples of environmental and social risks in business and how these risks were addressed. The book was designed specifically to teach Sojitz Group members the importance of cutting greenhouse gas emissions, conserving biodiversity, and other efforts to lessen the environmental impact of business activities. Additionally, it aims to deepen understanding of human rights due diligence and encourage cooperation with human rights due diligence in the future.

As part of this handbook, we recommend suppliers use the CSR Survey as a way to inform us of negative environmental and human rights impacts and lessen the burden placed on them by on-site visits and auditing.

In prioritizing handbook distribution, we refer to the Global Compact Human Rights Business Dilemma Forum* and a “risk map” we prepare to analyze the impact of each division’s business on stakeholders. For FY2017, we prioritized distribution to the 345 Group companies and suppliers below.
* A platform for sharing information regarding environmental and social issues, provided by the UN Global Compact.

Located in High-Risk Countries
Total
Distributed to
% received
Suppliers conducting business
directly with Sojitz Corporation
(※1)910
(※2)147
16%
Suppliers conducting business directly with 6 major Group companies (※3)
(※1)3,937
(※2)128
3%
Overseas consolidated subsidiaries/holdings
319
70
22%
Total
5,166
345
7%
  • *1:Number of suppliers from whom Sojitz Group made purchases in FY2016, regardless of country where the supplier is located
  • *2:Number of suppliers singled out from the total based on [(1) the supplier being located in a high-risk country], [(2) the transaction amount with the supplier meeting or exceeding a certain level], [(3) the supplier not being a Sojitz Group company or overseas subsidiary of Sojitz Corporation]
  • *3:Sojitz Machinery Corporation, Sojitz Marine & Engineering Corporation, Sojitz Pla-Net Corporation, Sojitz Foods Corporation, Sojitz Building Materials Corporation, and Sojitz Kyushu Corporation
    (Nissho Electronics Corporation, Sojitz Aerospace Corporation, and Sojitz New Urban Development Corporation have no business with suppliers in high-risk countries, excluding them as of this fiscal year.)

From FY2018, we will gradually expand the scope by which these policies are shared to include suppliers for overseas subsidiaries and consolidated subsidiaries/holdings, thereby inspiring greater understanding and cooperation regarding Sojitz’s policies.

Risk Assessment

We conducted a CSR survey in order to better understand how Sojitz Group companies and suppliers are working to mitigate environmental and social (human rights) risks.

The survey questionnaire comprised 50 questions related to six of the focus areas (*) named in the Sojitz Group CSR Action Guidelines for Supply Chains. It was prepared to facilitate communication simultaneous with efforts to mitigate environmental risk factors which could easily develop into human rights risks. The content was made as broad as possible in order to facilitate communication regardless of to which diverse Sojitz industry the entity belongs.

* Human rights, workplace safety and sanitation, fair trade and anti-corruption, disclosure, product/service quality and safety control

The survey results were reported to our CSR Committee, discussed, and then reported to the Management Committee and the Board of Directors. The information was also utilized as the basis for selecting on-site inspection targets.

Activities in FY2017

Sojitz Group companies are a part of supply chains in a wide number of industries. For this CSR survey, we prioritized 38 total consolidated subsidiaries which we singled out as companies with whom our policies should be shared. The results showed that there were no issues requiring response to human rights infractions/labor issues, violations of environmental regulations, negative impact on ecosystems, or any other issues requiring immediate amendment.

Going forward, we will intensify efforts to mitigate risks. This includes having departments do on-site inspections of consolidated subsidiaries which responded to the survey, in order to understand the actual situation on site, share points for improvement, and monitor work to fix issues.

Improvements/Remedial Action

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

In June 2018, the Corporate Sustainability Office visited the Kyodo Sojitz Feed Co., Ltd. ("KSF") in Vietnam together with an outside specialist. KSF is a consolidated subsidiary conducting mainly production and sales of feed for raising pigs and chickens. With the demand for meat in Vietnam expected to continue to rise, 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 availablity 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

■Reflecting on the Inspection

With the growth of the population and economy in Vietnam, food culture will diversify and the demand for meat is expected to increase further. Under these circumstances, our mission is to contribute to the livestock industry in Vietnam by producing and providing feed made with Japanese livestock technology, thus bringing safe and reliable meat to the Vietnamese market.

We consider our company's initiatives on workplace conditions and environmental conservation to be absolutely essential in pursuing our business activities in harmony with the local society. Therefore, in addition to complying with various laws and regulations, we are also striving to further increase the quality of our management, such as through acquiring the GLOBALG.A.P. Certification.

As one effect of the certification process, the inspection did not result in any major findings requiring immediate attention, but brought us to various realizations on how to continue to further improve the workplace environment. We immediately shared these findings with individuals in charge at the factory and put improvement initiatives into place.

Kyodo Sojitz Feed Co.,Ltd.
(Left) Keita Nakamura, Deputy General Director
(Center)Takanobu Hama, General Director
(Right) Taiki Tomoyama, General Manager

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