We are well aware of the importance of meeting the demands of society. By developing mutual trust relationships with business partners through fair, proper, and transparent transactions, we are committed to meeting our social responsibilities not just through the efforts of the Nabtesco Group alone but with the cooperation of the entire supply chain.
In order to promote CSR-oriented procurement, we need to have expertise and knowhow in environment- and human rights-related measures, which are not conventionally handled by purchasing departments. The Purchasing Planning Department of the Production Innovation Division, in collaboration with the Environment & Safety Department, the Quality Promotion Department, the Compliance Promotion Department, the Legal Department, the General Administration Department, and other head office departments, plays a central role in promoting CSR-oriented procurement, including supporting the activities conducted to this end by the in-house companies and Group companies. The Purchasing Planning Department discusses and decides on the related policies and measures at the Group Purchasing Meeting held with the participation of the procurement departments of each in-house and Group company, which work to fulfill the Group’s CSR throughout the supply chain in cooperation with their business partners.
In accordance with the globalization of our business, we increasingly need to respond appropriately in our supply chain to the worldwide demands related to the environment and human rights. On April 1, 2014, aiming to further foster CSR activities across the supply chain, we established the Nabtesco Group CSR-Oriented Procurement Policy. In formulating this policy, we referred to the ISO 26000 standard, the United Nations Guiding Principles on Business and Human Rights, the Electronic Industry Citizenship Coalition (EICC) Code of Conduct, and other international guidelines, and also incorporated into the policy the ideas expressed in the Nabtesco Group Code of Corporate Ethics and Code of Conduct.
Nabtesco Group’s CSR-Oriented Procurement Policy
We have been visiting suppliers in China, Thailand and South Korea to brief them on the Nabtesco Group CSR-Oriented Procurement Policy since the latter half of FY2014, thereby accelerating the global penetration of the policy. Specifically, in FY2014 we briefed approximately 600 suppliers on the policy. We will further foster CSR-oriented procurement across the Group in order to meet the expectations of a wide range of stakeholders, including customers, by making new suppliers aware of the policy and raising existing suppliers’ awareness of the policy and enhancing partnerships with them.
In FY2014, we asked 1,105 primary (tier-1) suppliers in Japan and overseas to reply to the Nabtesco Group CSR-Oriented Policybased self-assessment questionnaire (SAQ) survey. In conducting this survey, we used the Internet to make it easier for respondents to reply.
Also receiving support from a thirdparty organization, the members of our procurement departments visited some suppliers to foster mutual communication and jointly set measures to further promote CSR activities, including making improvements on the environment- and occupational health and safety-related matters.
Based on the survey results, we will interview suppliers to identify our CSR challenges and risks, and make necessary improvement plans.
In the Basic Purchase Agreement that we conclude with new suppliers, we list compliance, consideration to the environment and occupational health and safety, and prohibition of bribery as the most important items to be observed by our suppliers.
Basic Purchase Agreement
Nabtesco signed the United Nations Global Compact in April 2014 to show that it supports this international initiative, and has since been proactively participating in the activities conducted by the Global Compact Network Japan. In FY2014, we worked to set norms and criteria and to solve problems for global CSR-oriented procurement in cooperation with peers and companies in other industries as a corporate leader for the supply chain study group.
Nabtesco calculates the total greenhouse gas emissions across the supply chain for each fiscal year and has the calculation results verified by a third party (Bureau Veritas Japan) to ensure the reliability of the data.
* The Scope 3 emissions are calculated in line with the basic guidelines on the calculation of greenhouse gas emissions across the supply chain set by the Ministry of the Environment and the Ministry of Economy, Trade and Industry.
The Konan Plant has launched a joint project with suppliers to optimize the transportation of goods procured from the suppliers. Specifically, in the project, the Plant is reducing CO2 emissions and the use of gasoline by reducing the frequency of truck transportation by shifting to cyclic transportation, and also reducing the use of packaging materials, such as cardboard, while working to increase the loading efficiency. We will share this success example with the other plants of the Nabtesco Group. In June 2015, in order to optimize the transportation of goods procured from suppliers and to build “win-win” relationships with the suppliers, we joined the Japan Institute of Logistics Systems.
The term “conflict minerals” refers to
four mined minerals (gold, tantalum, tin
and tungsten), which may be partially
used to fund armed groups and exacerbate
conflicts in the Democratic Republic
of the Congo and surrounding countries.
In the United States, pursuant to the
Dodd-Frank Wall Street Reform and
Consumer Protection Act established in
2010, companies using these minerals
are required to report such use to the
Securities and Exchange Commission.
As neither Nabtesco Corporation nor its Group companies are listed on US stock markets, and therefore are not subject to the law or the reporting obligations. The Nabtesco Group, however, is committed to establish a responsible supply chain management framework and to avoid becoming complicit in the activities of armed groups and conflicts, while keeping an eye on maintaining international peace and security.
In FY2014, we received requests from multiple customers to conduct surveys on conflict minerals at our sites. In response, we are conducting the Reasonable Country of Origin Inquiry (RCOI) in cooperation with our suppliers.