We conduct an annual sustainability procurement survey of our major suppliers in order to identify potential sustainability risks in our supply chain and take appropriate measures.
Risk management and KPIs
We use the following steps to identify and manage sustainability risks throughout our supply chain.
- Conduct an annual sustainability procurement survey of key suppliers and analyze survey results to identify potential sustainability risks in the supply chain.
- For suppliers classified as “high-risk suppliers” as a result of the survey, we conduct interviews to confirm whether or not they plan to make improvements regarding evaluation items (e.g. human rights) that we consider important, and conduct on-site audits as necessary.
- Send suggestions for improvement to high-risk suppliers regarding items requiring improvement, and work together to improve their efforts.
- Monitor the status of items requiring improvement through annual sustainability procurement surveys.
In conducting the sustainability procurement survey, we set the following KPIs to achieve our goal of “fair and good business relationships with suppliers”, and together we aim to address CSR-related issues, provide safe and reliable products and services to our customers, and conduct corporate activities that earn the trust of society.
|Percentage of respondents who completed the sustainability procurement survey*||More than 90%||Fiscal 2020 and every year thereafter||92%||93%|
|Supporting improvement activities for highrisk suppliers||100% implementation||Fiscal 2021 and every year thereafter||-||100%|
|Conducting supplier inspections and CSR audits||More than 2 companies||Fiscal 2021 and every year thereafter||-||5 companies|
Softbank affiliates are not included in the survey.
Overview of the survey
Since fiscal 2020, we have adopted the Self-Assessment Questionnaire (SAQ*1) developed by the United Nations Global Compact Network Japan (GCNJ) in 2017 to conduct our annual sustainability procurement survey of major suppliers. The SAQ is based on the 10 principles of the Global Compact, international guidelines such as ISO 26000 and CSR questionnaires from specific industries and identifies nine core items that can be shared between buyers and suppliers regardless of industry.
Global Compact Network Japan “CSR Procurement Self-Assessment Tool Set” (in Japanese)
In FY2021, we also conducted a “High Risk Management Questionnaire*2” using a common format with KDDI Corporation, whom we collaborate on sustainability procurement activities*3.
The SAQ is based on the 10 principles of the Global Compact, international guidelines such as ISO 26000 and CSR questionnaires from specific industries and identifies nine core items: (1) Corporate governance related to CSR, (2) Human rights, (3) Labor, (4) Environment, (5) Fair corporate activities, (6) Quality, (7) Information security, (8) Supply chain, (9) Coexistence with local communities, that can be shared between buyers and suppliers regardless of industry.
The survey covers critical issues such as human rights, environment, etc.
which are not covered by each company policy or guidelines (code of conduct).
Target suppliers: In fiscal 2021, we surveyed major suppliers that are included in the top 90% of purchases. Softbank affiliates are not included in the survey.
Results of the survey
The average score rate for the total of the nine items was 77%. The peak values with a high score rate were (3) Labor, (5) Fair Business Practices, (6) Quality and safety and (7) Information Security, while the peak values with a low score rate were (2) Human Rights, (4) Environment, (8) Supply Chain and (9) Community.
|Sections||Number of questions||Maximum point yield||Average scoring rate|
|(1) Corporate Governance||20||100%||83%|
|(2) Human Rights||9||100%||71%|
|(5) Fair Business Practices||20||100%||85%|
|(6) Quality and safety||7||100%||86%|
|(7) Information Security||9||100%||92%|
|(8) Supply Chain||7||100%||55%|
Identifying sustainability risks
We define “sustainability high risk” as a situation in which suppliers human rights, labor, or environmental practices are inadequate and are likely to have a significant negative impact on our business activities, such as human rights violations that could affect our corporate reputation, poor labor conditions that could reduce the quality of our products and services, or violations of environmental or labor-related laws and regulations.
To identify high-risk suppliers, we conduct a sustainability procurement survey that evaluates suppliers from nine perspectives, including human rights, labor, and the environment. Suppliers with an average score of 65% or lower and do not meet the criteria to be considered as having a particularly significant risk on the nine criteria are classified as “high-risk” suppliers, and we work together with them to improve our initiatives.
|Risk Rank||Evaluation Score||FY2021||Description|
|Rank A||Total 86% or greater||40%||Suppliers able to act at the level required by our Supplier
Code of Ethical Conduct.
|Rank B||Total 66-85%||29%||There are items where suppliers are not acting at the required level of our Supplier Code of Ethical Conduct, but voluntary improvements are made.|
|Rank C||Total 65% or under with no significant risk items||18%||Need to monitor the status of items for which suppliers are not acting at the required level of our Supplier Code of Ethical Conduct based on the improvement plan.|
|Total 65% or under with no significant risk items achieved||13%||Items that are not performed at the required level of our Supplier Code of Ethical Conduct (some items in human rights, labor, environment) are considered potentially risky and a corrective action plan needs to be created.|
Supporting improvement activities
For suppliers identified as having sustainability risks as a result of the sustainability procurement survey, we 1) share the results of the analysis, 2) conduct additional interviews to clarify concerns, and 3) discuss the direction of action to support improvements. In fiscal 2021, six suppliers were identified as having potential risks to prepare corrective action plans, and we have asked suppliers to take advantage of this assessment to improve their initiatives.
|Type of risk||Contents||Number of supported suppliers for improvement
|Improved guidance rate|
|Company-owned factories and suppliers in designated countries/regions||Failure to confirm whether the company has its own factories or suppliers in designated countries or regions.||1 company||100%|
|Foreigner Skills Internship Program||
|Environmental Risks||No specific quantified reduction targets have been set for GHG emissions.||3 companies|
Conduct supplier visits
In the past, we have conducted on-site inspections of our suppliers factories to check on quality and safety assurance, occupational health and safety and other issues. In fiscal year 2021, we conducted audits focusing on monitoring compliance with the Supplier Ethics and Rules of Conduct (CSR audits), and conducted audits of five companies. As a result of the audit, if a company is assessed as a high-risk company that needs to make improvements, an improvement plan will be formulated and implemented after the audit.
|Target||-||-||-||2 Companies or more (CSR Monitoring)||10 Companies or more (CSR Monitoring)|
|Achievements||7 Companies (Inspection)||9 Companies (Inspection)||1 Company (Inspection)||5 Companies (CSR Monitoring)||-|