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||September 29, 2023|
|Attendees||Officer in charge of the Purchasing Department, Procurement manager of business units and group companies|
|Contents||Human Rights Due Diligence in the supply chain, Environmental response|
CSR procurement training
The Purchasing department provides CSR procurement training as part of an education course for procurement departments' personnel.
The subjects include sustainability, basic knowledge of CSR procurement, importance of efforts, and specific actions required.
|Number of trainees|
(Percentage of procurement personnel attending: 90%)
(Targeted personnel: Procurement personnel and employees of SHI and domestic Group companies)
We conduct a questionnaire survey on the status of sustainability approaches to our major suppliers to assess ESG risks in the supply chain.
Through these approaches, we are working to strengthen sustainability throughout the supply chain.
Supplier Survey and Summary of Results
|Number of responding companies||409 companies|
|Percentage of responding companies to total number of Tier 1 suppliers||5.5%|
|Summary of Survey Results||We identified strengthening our efforts in the following areas as particularly important tasks.
- Effective use of environment and energy
- Safety of production facilities
- Corruption and bribery
- Waste reduction
Declaration of Partnership Development
Responsible Mineral Procurement
The SHI Group has established "SHI Group Basic Policy on Conflict Minerals Mined in the Democratic Republic of the Congo(DRC) and Adjoining Countries" in order not to be complicit in violation of human rights, forced labor, child labor, abuse, environmental destruction, corruption, or crimes against humanity through the procurement of Conflict Minerals. On the basis of this policy, we are committed to responsible mineral procurement.
We apply this policy not only to the Democratic Republic of the Congo and its neighboring countries, but also to any other conflict-affected and high-risk areas (CAHRAs) if we determine that the risk is high on the basis of our risk assessment.
In the Democratic Republic of the Congo (DRC), anti-government armed organizations use forced labor to mine tin, tungsten, tantalum, and gold (hereinafter "Conflict Minerals"), and use proceeds from such minerals as funds for their activities.
In addition, organized violence against local residents is raised as an international issue of concern.
On August 22, 2012, the Securities Exchange Committee (SEC) adopted the "Final Rule on Disclosure Regulations for Conflict Minerals" as a procedure related to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in July 2010.
As a result, a listed company in the U.S. is required to report the use of Conflict Minerals in its products every year.
In order to fulfill our social responsibilities, we do not participate in the procurement of conflict minerals.
The SHI Group will promote considering necessary systems and measures in accordance with this policy.
Our business partners are requested to understand our policy and cooperate on our efforts.
We will endeavor to provide products with less environmental load by promoting green procurement.