Honoring the “Supply Chain CSR Action Guidelines” in our Lumber Business
〜Sojitz Wood Procurement Policy〜
Based on the “Sojitz Group Supply Chain CSR Action Guidelines,” Sojitz set a “Wood Procurement Policy” for responsible wood procurement in September 2015.
In addition, Sojitz achieved 100% wood traceability in 2018, two years ahead of its goal of FY2020. In February 2021, Sojitz established a new qualitative target to be achieved by FY2025.
Wood Procurement Policy
In honoring the Sojitz Group Statement, we are committed to do our best to cooperate with business partners to procure wood in line with the following policies, based on the Sojitz Group CSR Action Guidelines for Supply Chains.
- 1. Legality
We will not handle wood obtained through illegal logging.
- 2. Environmental Consideration
We will not handle wood obtained through logging methods which are detrimental to high conservation value forests.
- 3. Social Consideration
In view of logging’s potential to adversely impact human rights, we will seek to mitigate any negative impact associated with wood procurement.
This policy covers all roundwood; sawnwood and wood-based panels; paper manufacturing materials such as wood chips, particles, and pulp; paper products; and woody biomass handled by Sojitz and its consolidated subsidiaries (hereafter, “wood.”)
We selected and conducted a targeted survey of wood that makes up over 80% of our total purchased wood supply in terms of monetary value (*1), using criteria including the supplier country’s risk level (*2), the amount of wood purchased in terms of monetary value, and suppliers’ compliance with Sojitz policies, from among Sojitz Group’s approximately 1,500 wood-related suppliers (*3).
The survey conducted in the 2022 fiscal year found that of the surveyed wood supply, 58% was imported wood, and 42% was produced domestically. We take an approach to surveying that accounts for the unique characteristics of both the import and domestic industries.
- *1：The amount surveyed is at least 80% of purchases, excluding Group companies and discontinued suppliers.
- *2：Our country risk evaluation adopts the Corruption Perceptions Index made available by each year by Transparency International, an international non-governmental organization working to prevent corruption around the world. This index ranks countries individually by comparing levels of corruption among public servants and politicians.
- *3：Details of the scope of Sojitz Group’s wood procurement survey are as follows.
|Product||Sojitz Corporation||Sojitz Building Materials Corporation||Sojitz Kyushu Corporation|
|Paper and pulp||*）||○|
*) Sojitz Corporation concluded its paper and pulp business in FY2021.
Note: Product definitions are as follows.1） Lumber products：Including lamina 2） Paper and pulp：Sold as main products 3） Fiberboard：OSB, MDF, particleboard 4） Engineering wood：Including LVL, CLT, and panel boards 5） Building materials (solid wood)：Internal construction materials such as fittings, fixtures, flooring materials, and paneling 6） Building materials（overseas products）：Products produced by overseas manufacturers 7） Pre-cut wood：Structural and paneling materials
Approach to Imported Wood
Sojitz recognizes various issues regarding imported wood, such as illegal logging, human rights violations against local communities, and threats to biodiversity in certain areas.
Sojitz Group is working together with each supplier to monitor and improve the legality of logging practices as well as the consideration for the environment and society in areas where logging takes place, as outlined in the Sojitz Wood Procurement Policy.
Sojitz Group companies conduct business with a large number of suppliers, and Sojitz makes a continued effort to raise awareness of wood procurement-related issues among its suppliers and achieve capacity building at these organizations by sharing examples of companies implementing best practices to educate on industry standards.
Under the supervision of WWF Japan (*4), the wood selected for survey was checked for 1) traceability to its country of origin, and 2) suitability of forest management (whether the forest is subject to environmentally/socially conscious forest management).
- *4：We have adopted use of WWF Japan’s “Responsible Purchasing Checklist for Forest Products” to confirm 1) wood traceability in the country of origin and 2) suitability of forest management. We also invited WWF to hold a briefing session in FY2015 to explain how to confirm whether forests with high conservational value in terms of biodiversity are being appropriately protected, as well as how to define human rights issues. Sojitz's lumber-related departments and subsidiaries attended the lecture. Furthermore, we referred to advice from WWF Japan in establishing the targets below.
1) Wood was evaluated for traceability back to the place of origin and 2) suitability of forest management, after which it was sorted into one of the following four levels.
- Level A：Wood confirmed to be certified wood (*5)
- Level B：Wood which has not been certified, but for which we have verified both traceability and suitability of forest management (i.e. that the forest is subject to environmentally/socially conscious forest management)
- Level C：Traceable wood
- Level D：Wood lacking traceability
- *5：Wood certified under FSC®, PEFC, etc. FSC®-certified wood is given the highest score.
For reference: Sojitz Corporation’s FSC® license code is FSC-C009917
Targets & Results
Target for FY2025
Building upon our successful completion of the FY2020 goal, Sojitz has established the following target for FY2025.
Sojitz Group will ensure that by FY2025, 100% of the wood we handle is
either certified wood (Level A), or wood that has not been certified,
but that we have verified as being procured through
environmentally/socially-conscious methods (Level B).
Maintain 100% traceability as per our FY2020 goal
In order to achieve our target for FY2025, we have been implementing the following three measures since FY2021:
＝Initiatives to Achieve Our Goal＝
- 1.Increase quantity of certified wood handled by Sojitz Group
In order to promote the wider adoption of forest certifications which contribute to sustainability in the timber and wood products industry, Sojitz Group will strive to expand its handling of materials with Chain-of-Custody (CoC) certification, which certifies the distribution channels of the materials.
* Chain-of-Custody (CoC) refers to forest products that have been properly managed during the processing and distribution process to ensure that they are not mixed with non-certified forest products.
- 2.Encourage business partners to obtain wood certification
We encourage our suppliers to obtain FSC, PEFC, or other forestry certifications, as well as Chain-of-Custody certification which traces the distribution channels of forest products. We will encourage our secondary and tertiary suppliers to obtain certifications when conducting our annual survey on our wood procurement policy, and we also clearly state this request in our survey forms, guidance for external parties, and other documents.
- 3.Promote the use of eco-friendly wood products to consumers
We will encourage our domestic customers to adopt environmentally friendly products and promote the use of environmentally friendly products.
Qualitative Progress and Sojitz’s Target
- *6：We have narrowed our evaluation criteria for Level A wood each year. For the FY2020 survey onwards, we limit the category to only wood that has been officially certified. (Of the total amount of Level A and B wood, Level A wood made up 22% in the FY2022 survey. Of the total amount of wood surveyed, Level A and B wood together made up 94.5% in the FY2021 survey and 94.4% in the FY2022 survey (a decrease of 0.1%).
- * Levels A through D were determined based on evaluations conducted by Sojitz using WWF Japan’s “Responsible Purchasing Checklist for Forest Products.” Percentages in the above table were calculated by dividing the cost of procured (imported) wood in each level by the total cost of all imported wood included in the survey. The FY2022 survey is calculated from the amount of procured wood in FY2020 as the selection process for target companies requires additional time.
In order to increase the objectivity of our calculations, Sojitz has acquired third-party assurance from KPMG AZSA Sustainability Co., Ltd. (KPMG) for the data detailed below since FY2020. The FY2022 data assured by KPMG is marked with star ("☆”) in the data table above.
- 〔Scope of Third-party Assurance〕
- KPMG provides assurance as to whether the results of the survey conducted in FY2022 on procured (imported) wood described above are prepared, in all material respects, in accordance with the criteria established by Sojitz, based on the evaluation conducted by Sojitz using WWF Japan’s “Responsible Purchasing Checklist for Forest Products.”
KPMG takes the evaluation conducted by Sojitz as given with no consideration of the validity of the evaluation (Levels A through D).
Reference：Target Achievement Results Prior to FY2020
- Target：Sojitz Group will ensure that 100% of the wood we handle is traceable (reduce wood classified as Level D to 0%) by FY2020.
- Results：We achieved our goal (reduce Level D wood to 0%) in FY2018 and successfully maintained 100% traceability for the following four years.
＝Efforts Taken to Improve＝
- ･Conducted traceability surveys before initiating trade with new potential suppliers in countries with high country risk
- ･Promoted the use of eco-friendly wood products to consumers
- ･Conducted on-site due diligence for suppliers with any matters of concern (FY2017: 1 supplier; FY2018: 1 supplier; FY2019: 2 suppliers; FY2020 and FY2021: postponed due to COVID-19; FY2022:１ supplier)
（For reference: Sojitz Corporation’s FSC® license code is FSC-C009917）
Approach to Domestically-Produced Wood
We recognize that domestically produced wood requires awareness of a different set of issues than imported wood, such as labor safety at logging sites and regional resource recycling. As we continue to encourage both our domestic and international suppliers to be aware of social and environmental issues, we are also working to develop distinct approaches for imported wood and domestic wood in order to address each individually.
Placing an emphasis on the recycling of resources in regions where wood is harvested, we will build community-based forestry through discussions with our stakeholders as we work to address these issues.