Business Partners
Basic Views
As we, the Sumitomo Heavy Industries (SHI) Group, expand our global business, we are striving to build mutually constructive and healthy relationships with our suppliers while simultaneously working to reduce our environmental, social, and governance (ESG) risks throughout our supply chain in addition to the traditional areas of costs, quality, and delivery date .
We will promote responsible procurement activities throughout our supply chain by working with suppliers to resolve sustainability-related issues in the spirit of respecting human rights, valuing compliance, and protecting the environment, based on our own transactions in a fair, equitable, and transparent manner.
Our Group, the Sumitomo Heavy Industries (SHI) Group, aims to provide products and services that help advance economic and technological development toward realizing a sustainable society. We have established these CSR Procurement Guidelines to achieve this aim. The cooperation of all SHI Group suppliers will be essential to our success. Therefore, we request your understanding and cooperation in joining us to promote progress in each item established herein.
- 1Fair and equitable competition and transactions and thorough attention to compliance
- Compliance with all business laws and regulations
- Realization of fair and equitable competition and transactions
- Protection of and respect for intellectual property
- Prohibition of the offering of improper advantages
- Compliance with laws and regulations related to import and export
- Preservation of confidentiality
- Responsible mineral procurement
- Severing of relations with antisocial forces
- Establishment of an internal reporting system
- 2Human rights, labor, and health and safety
- Compliance with labor laws and regulations
- Respect for human rights and prohibition of unfair discrimination, labor, and harassment
- Prohibition of child labor and forced labor
- Occupational health and safety
- Appropriate management of working hours and consideration for living wages
- Respect for freedom of association and collective bargaining
- 3Consideration of the environment
- Compliance with relevant laws
- Establishment of an environmental management system
- Prevention of environmental pollution and control of hazardous chemical substances
- Effective use of resources/energy and reduction of negative environmental impact
- Consideration for biodiversity
- 4Promotion of communication with stakeholders through information disclosure
- 5Social contribution and coexistence/co-prosperity with local communities
- 6Application throughout the supply chain
CSR Procurement Promotion System
Our Purchasing Department at the Head Office and business divisions work together to promote CSR procurement across the entire SHI Group.
At the Procurement Managers' Meeting, composed of those responsible for procurement from the Purchasing Department and divisions and group companies, company-wide policies and activity plans are shared to ensure that procurement activities are conducted in compliance with our CSR Procurement Guidelines. Important matters, targets, and progress are deliberated and resolved at the Board of Directors meetings.
In addition, education on CSR procurement is provided in the training sessions organized by the Purchasing Department.
Approaches to CSR Procurement Implementation
Approaches within the SHI Group
Procurement Manager Meeting
This meeting is hosted by the Purchasing Department twice a year as a meeting across the SHI Group.
Through this meeting, we explain, and disseminate policies for sustainability, procurement compliance, and human resource development, which concern the entire SHI Group.
| Most recent meeting date | October 4, 2024 |
|---|---|
| Attendees | Officer in charge of the Purchasing Department, Procurement manager of business units and group companies |
| Contents | Human Rights Due Dilligence in the supply chain, Responsible Mineral sourcing, Environmental response |
CSR procurement training
The Purchasing department provides CSR procurement training as part of an education course for procurement departments' personnel.
This year, we covered sustainability trends, approaches to CSR procurement, and responses to Responsible Mineral Procurement.
| Number of trainees | |
|---|---|
| FY2024 | 400 persons (Percentage of procurement personnel attending: 85%) (Targeted personnel: Procurement personnel and employees of SHI and domestic Group companies) |
Supplier Survey
In the fiscal year 2024, we requested a survey from 702 key suppliers, who account for the top 80% of our group's total procurement amount, and received responses from 573 companies.
Supplier Survey and Summary of Results
| Number of responding companies | 573 companies |
|---|---|
| The response rate of key suppliers | 81.6% |
| Question Structure | Questions designed to measure each company's understanding and implementation level according to the CSR Procurement Guidelines |
On-site Survey
【Japan】
Our group has prioritized "Building of sutainable cooperate suppliy chain" and emphasizes respecting the human rights of foreign workers, who are considered at high risk of human rights violations.
We have designated 24 suppliers to focus on based on the number of foreign workers they employed and their net sales proportions to our company, labeling them “potential high-risk suppliers” and conducting on-site audit to all targeted suppliers by 2026 and encouraging corrective actions as necessary.
【Overseas】
For overseas efforts, we conduct on-site audit based on the risks of the global supply chain identified by the human rights risk project, focusing on locaions with factories.
Additionaly, overseas audit are conducted with the involvement of third-party organaization (ASSC).
【Results of On-site Survey for FY2024】
| （Japan）Number of Potential high-risk suppliers | 8 companies |
|---|---|
| （Japan）Number of surveys based on ruestionnaire results | 4 companies |
| （Overseas）Number of audits | 10 companies (Indonesia, Vietnam, Korea, Finland) |
| （Overseas）Number of audits conducted by third-party organaization | 4 companies (Indonesia, Vietnam) |
In FY 2024, we audited 26 companies and confirmed that there were no sighificant human rights or labor environment risks.
Responsible Minerals Procurement
Based on the Responsible Minerals Procurement Policy, the Sumitomo Heavy Industries Group is identifying risks in accordance with the "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas" issued by Organisation for Economic Co-operation and Development (OECD).
The SHI Group is committed to promote Responsible Mineral Procurement to ensure that it is not complicit in human rights violations, labor problems, environmental destruction, and other risks associated with the process of mining and trading minerals in the Democratic Republic of Congo (DRC) and neighboring countries and Conflict-Affected and High-Risk Areas (CAHRAs).
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the EU Conflict minerals Regulation of 2021, among others, and increasingly requiring companies to conduct due diligence to ensure that the mineral resources they procure do not contribute to conflicts or human rights violations.
Our company, taking reference from the "OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas" issued by Organisation for Economic Co-operation and Development (OECD), will establish a promotional framework to ensure Responsible Mineral Procurement.
By conducting mineral surveys and verifications in the supply chain, we will ensure the elimination of products, components, and materials containing minerals with risks such as human rights violations, labor issues, and environmental problems.
We ask our suppliers to endorse our initiative and activities for Responsible Mineral Procurement and cooperate with us in excluding products, components, and materials containing minerals with risks such as human rights violations, labor issues, and environmental problems through surveys.
In the unlikely event that risks, such as smelter risk, in the supply chain, are identified, we request our suppliers to take corrective actions.
Cooperating with External Organizations
In November 2024, Sumitomo Heavy Industries, Ltd. has joined the Responsible Minerals Initiative (RMI), an international initiative. SHI Group conducts due diligence by utilizing RMI’s Responsible Minerals Reporting Templates and program that certifies which smelters are conflict-free. We aim to achieve a transparent and responsible minerals sourcing process throughout the supply chain.
Green Procurement
We will endeavor to provide products with less environmental load by promoting green procurement.