The Nitto Group is committed to sustainable procurement activities through initiatives such as "Risk Management," "CSR Procurement," and "Green Procurement." These activities are aligned with the Nitto Group's policy of placing ESG at the core of its management and are implemented through the Supplier ESG Program. The goal of these procurement activities is to identify and mitigate risks associated with supply chain disruptions, human rights violations, and environmental issues such as CO2 emissions reduction, in response to changes in market conditions.
In implementing these initiatives, the Nitto Group works closely with its partners, regularly coordinating and discussing key matters such as long-term order plans and delivery schedules. This ensures that undue burdens are not placed on partners while maintaining a sustainable business environment. These efforts aim to prevent the risk of human rights violations across the supply chain, fostering the development of healthy, long-term business relationships that enable both Nitto and its partners to achieve sustainable growth.
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In pursuit of the realization of a sustainable society, the Nitto Group shares values with its partners and works with them to resolve procurement risk issues in the supply chain.
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Basic Policy on Procurement: The Nitto Group shares its basic policy for CSR procurement. Supplier Code of Conduct: We set out our expectations to ensure that the Nitto Group and our partners share the same values. The Supplier Code of Conduct was created with reference to the RBA. We raise awareness of Supplier Code of Conduct through partnership meetings attended by our partners and request that they comply with the Supplier code of conduct. CSR Procurement Assessment: We request and collect self-assessment questionnaires (SAQ) with the purpose of checking the status of our partners' implementation of the Supplier Code of Conduct. The SAQ is based on RBA requirements. We feedback the results and then request corrective action. Starting in 2023, we began conducting EcoVadis surveys Further implementation of CSR procurement: We conduct on-site surveys to understand the details of our partners' CSR activities, conduct conflict mineral surveys to investigate and correct procurement risks related to 3TG and other items, and conduct to investigate and correct item-specific human rights issues. |
Our CSR procurement process is carried out through the PDCA cycle as shown in the diagram.
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The Nitto Group conducts an annual CSR Procurement Qustionnaire to enhance the transparency and improvement of our partner companies' CSR activities. This survey is based on the RBA code of conduct and consists of key elements such as "Human Rights and Labor," "Health and Safety," "Environment," "Fair Trade," "Information Security," and "Penetration of CSR into the supply chain" We request detailed information from our partners regarding these items, and based on the results, we share specific action plans aimed at improving sustainability. Furthermore, since fiscal year 2023, we have introduced EcoVadis to comprehensively evaluate CSR activities, quantify outcomes, and track progress, with the aim of building a sustainable supply chain.
When selecting partners, the Nitto Group places importance on ESG (Environmental, Social, and Governance) performance in addition to price, delivery, and quality. We comprehensively evaluate all of these factors and aim to establish relationships that contribute to greater sustainability. We particularly focus on fostering long-term, trustworthy partnerships with those partners who demonstrate outstanding ESG performance. This policy aligns with our procurement principles, reflecting our commitment to actively selecting partners that prioritize ESG considerations. Through these efforts, we aim to share social and environmental responsibilities and work together to create sustainable value in the market.
The Nitto Group first clearly identifies key suppliers to implement CSR assessments. Specifically, in addition to partners with the highest transaction volumes, we define key suppliers as those whose transactions are considered highly important, those whose environmental impact—such as CO2 emissions—would be significant, and those where there are concerns about negative human rights impacts. These key suppliers are prioritized for CSR assessments, and we are strengthening our efforts to build a sustainable supply chain.
Additionally, to adapt to changes in market conditions and sustainability standards, we review and update the criteria annually.
We score the results of the CSR procurement assessment and provide all partners with a feedback report that lists their scores, average scores, and specific suggestions for improvement. This report helps partners understand the current status of their CSR activities and identify areas for improvement. Based on the results of the assessment, we request specific corrective actions from our partners and provide advice on how to achieve them. We cooperate with our partners to improve CSR activities in order to realize a sustainable supply chain. By formulating and implementing improvement plans, we aim to promote more transparent and responsible business activities and create social value together.
Please refer to the Sustainability Data Book for specific implementation results.
Since 2022, Nitto Group has been holding partnership meetings both domestically and internationally, aiming to share the current and future direction of the Nitto Group with its partners. Through these meetings, we aim to establish deeper, more collaborative relationships with our partners, going beyond the conventional buyer-seller framework. We ask for your understanding and cooperation in working together to unite the supply chain.
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Nitto Group is actively working to reduce CO2 emissions. In calculating the CO2 emissions of Nitto Group products, we use the emission data calculated by our partners to reflect their reduction efforts in our own CO2 emissions calculations. For this reason, we specifically request that partners submit their CO2 emission data. For partners who find it challenging to calculate their CO2 emissions, Nitto Group organizes specialized workshops and engages in discussions to support the calculation process together.We have already engaged in extensive discussions with many partners and have worked collaboratively on calculating the CO2 emissions of raw materials. Going forward, we will continue to actively discuss the calculation of CO2 emissions and explore methods for further reductions through ongoing dialogue with our partners.
Nitto Group provides training for Nitto Group buyers and stakeholders to deepen their understanding of their roles in our partners’ ESG programs. The vision for the Procurement Department in 2030 is to become a strategic department that supports a sustainable supply chain. In order to achieve divisional targets, we provide the following training, classified into Environmental, Social, Governance, and Other.
The purpose is to reduce the environmental impact throughout the supply chain and establish sustainable business operations. The training provides knowledge and practical skills on managing regulated chemical substances and reducing CO2 emissions. Participants will understand the importance of environmental protection and learn specific methods.
Understand the importance of human rights in business and promote ESG assessment throughout the supply chain. This training provides concrete methods for fulfilling corporate social responsibility and ensuring social fairness through strengthening CSR procurement activities. Participants will learn strategic approaches that improves sustainability throughout the supply chain, while leveraging ESG assessment.
We aim to establish sustainable procurement practices and ensure legal compliance and ethical business operations. This training provides the knowledge and skills to improve reliability and transparency in the procurement department. Participants will understand the importance of procurement regulations and standards and learn appropriate procurement processes.
We improve the basic skills of buyers and procurement departments, leading to more efficient operations and more effective supplier management. Throughout this training, participants will learn skills that are directly relevant to the workplace, such as cost analysis, negotiation skills, and supplier management. Participants will acquire cost analysis methods and effective negotiation techniques, improving competitiveness throughout the supply chain.
Through these training programs, Nitto Group's procurement department will realize a sustainable supply chain and play a strategic role moving toward 2030.
