Responsible Procurement
In recent years, the building and expansion of global supply chains has been accompanied by the further-growing impacts of corporate activities on society that include social issues such as human rights and labor, bribery and corruption, and environmental issues beginning with climate change. To solve such issues that could occur anywhere from the procurement of raw materials to production activities, companies must undertake management that focuses not only on their own companies but that also considers the entire supply chain.
DNP has worked toward Responsible Procurement together with domestic and overseas suppliers to eliminate risks in the supply chain and contribute to the realization of a sustainable society, and will continue to fulfill its social responsibilities in its procurement activities.
Medium-to long-term vision
For creating excellent value and cultivating strong compliance awareness at the same time, we work jointly with our supply chain stakeholders and conduct procurement that gives due consideration to human rights, the environment and other factors.
SDGs Covered by the Vision
Performance Indicators to Monitor the Progress in Achieving the Vision and Activity Results
| Performance indicators | Targets | Results |
|---|---|---|
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For most-recent fiscal year results |
Structure to Promote Management
Internal Structure and Management
In the Sustainability Committee, chaired by the President , DNP confirmed its commitment to undertaking responsible procurement that considers human rights, environment and other aspects throughout the entire supply chain while formulating a variety of necessary guidelines and promoting an assortment of initiatives to raise the effectiveness of these guidelines. Besides formulating the DNP Group CSR Procurement Guidelines, in our Basic Business Contract we also ask our suppliers to make efforts in accordance with these guidelines. Moreover, we have established the DNP Group Guidelines for Procurement of Paper for Printing and Converting and the DNP Group Green Procurement Guidelines for Chemical Substances as individual guidelines to cover themes of high importance. We continuously strengthen supply chain management through periodic supplier surveys and by feeding back the survey results and holding briefing sessions for suppliers. Also, within DNP, we periodically provide training for specialist staff involved in purchasing operations to promote an understanding by employees.
- DNP Group CSR Procurement Guidelines
- DNP Group Green Purchasing Policy
- DNP Group Guidelines for Procurement of Paper for Printing and Converting
- DNP Group Green Procurement Guidelines for Chemical Substances
- DNP Group Policies, Criteria and Data
- Compliance Hotline (Japanese site opens)(Open in a new window)
DNP’s Main Initiatives
Reinforcement of CSR Procurement Management
DNP is promoting responsible procurement initiatives that consider human rights and the environment. In 2006, we established the DNP Group CSR Procurement Criteria and since have been incrementally strengthening procurement management while considering international trends.
Initiatives to the Present
| 2006 | Formulated the DNP Group CSR Procurement Criteria *Started responsible procurement initiatives in collaboration with suppliers |
|---|---|
| 2011 | 2011 Revised Basic Business Contract *Requested that primary suppliers undertake procurement management in accordance with the DNP Group CSR Procurement Criteria |
| 2012 | Formulated the DNP Group Guidelines for Procurement of Paper for Printing and Converting |
| 2013 | Formulated the DNP Group Green Procurement Guidelines for Chemical Substances |
| 2017 | Revised the DNP Group CSR Procurement Criteria into the DNP Group Procurement Guidelines *Revised from procurement criteria that consider domestic business activities into guidelines that reflect the requirements of the international community based on the Electronic Industry Citizenship Coalition (EICC) (currently Responsible Business Alliance (RBA)) EICC Code of Conduct and the Japan Electronics and Information Technology Industries Association (JEITA) Supply Chain CSR Promotion Guidebook. Expanded scope of application to suppliers and agents at all overseas bases |
| 2018 | Expanded the scope of application to Group companies with independent purchasing functions |
| 2020 | Revised the DNP Group CSR Procurement Guidelines *Revised to include not only primary suppliers but also second-tier suppliers and beyond. Revised Basic Business Contract *Requested the undertaking of management in accordance with the CSR Procurement Guidelines from second-tier suppliers and beyond |
Initiatives Based on the DNP Group CSR Procurement Guidelines
Feedback from Fact-finding Survey and Results
In order to enhance the effectiveness of the "the DNP Group CSR Procurement Guidelines," DNP informs its major suppliers* and subcontractors of these guidelines and its policies regarding human rights and labor, the environment, fair trade and ethics, and other items stipulated in the guidelines, and periodically conducts surveys on the status of these efforts and provides feedback on the results. In addition, we carry out continuous management whereby we confirm issues and improvement measures at some suppliers through individual interviews based on the results of the previous year's survey and ensure these improvements are reflected in activities in the next fiscal year. The FY2021 survey did not find any serious compliance violation issues.
*Major suppliers = suppliers that account for 90% of DNP’s total annual purchases in descending order of purchase amount
Fact-Finding Survey/Interview Results for DNP Group CSR Procurement Guidelines
| Survey results | FY2018 | FY2019 | FY2020 | FY2021 |
|---|---|---|---|---|
| Number of companies surveyed | 379 | 220 | 353 | 164 |
| Overall average score(global) | 84 | 87 | 85 | 87 |
| Number of companies interviewed (instructed in writing) |
16 | 18 | 18(4) | 12(2) |
*Based on the survey results, we provide guidance for improvement through an interview and other means in the next fiscal year
Average Score by Theme of Fact-Finding Survey of Initiatives of DNP Group CSR Procurement Guidelines (Out of 100 Points)
| Average score | Overall average Excluding the recommended theme |
Establishing a management system | Legal compliance and respecting international norms |
Human Rights and Labor | Health and safety | Environment | Fair trade and ethics | Product Safety and Quality | Information Security | Business Continuity Plan | Social contribution Recommended theme |
|---|---|---|---|---|---|---|---|---|---|---|---|
| FY2021 (FY2020) |
87 (85) |
85 (80) |
89 (88) |
92 (89) |
91 (88) |
80 (78) |
87 (85) |
89 (88) |
91 (89) |
82 (80) |
81 (79) |
Education and Permeation
To promote an understanding of the DNP Group CSR Procurement Guidelines both inside and outside the company, we also simultaneously publish explanatory booklets (Japanese-English versions) and disclose detailed explanations of standards, terms, and their backgrounds. Moreover, within the company we provide periodic training for specialist staff involved in purchasing operations in addition to providing training on “business and human rights” to all DNP Group employees. Externally, we implement study sessions targeting main suppliers, and a total of 239 companies and 273 people have participated since the guidelines were revised into the DNP Group CSR Procurement Guidelines in FY2017.
Initiatives for Building a Sustainable Supply Chain
DNP is undertaking the following initiatives for building a sustainable supply chain.
Material Procurement BCP (Business Continuity Plan)
With a primary focus on “keeping our supply chain operational even in an emergency,” since February 2019 we have been regularly implementing the material procurement BCP questionnaire survey targeting first- to third-tier suppliers of raw materials for our main products and thus hedging risks.
Initiatives for Responsible Minerals Procurement
As legislation on human rights due diligence progresses, mainly in Europe and the United States, and awareness of the need to respect human rights grows in Japan and abroad, companies are required to manage risks and mitigate negative impacts throughout their supply chains. Especially in mineral resources, there are various risks such as human rights abuses including child labor, financing of terrorists, money laundering, illicit trade, complicity in conflicts, and environmental destruction in high-risk areas such as conflict zones.
DNP has established "Responsible Minerals Procurement" as one of the items in the "DNP Group CSR Procurement Guidelines" to ensure that we are not complicit in such human rights abuses, and we have established a management system in line with the OECD "Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas".
In FY2021, we conducted a "Survey of Suppliers on Human Rights Issues and Conflict Mineral Issues" targeting major suppliers and conducted a survey on the origin of raw materials. We identify smelters and mines for the five minerals tin, tantalum, tungsten, gold, and cobalt contained in raw materials and conduct risk assessments. From FY 2022, in addition to the above five minerals, we have started risk assessments using RMI's PRT for 18 new minerals, including aluminum, lithium, nickel, and copper. For minerals that are more critical to our business, we hold individual discussions with suppliers to conduct detailed risk assessments for the entire supply chain, including smelters/refiners and mines.
*DNP's initiatives related to the five steps of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas are described in DNP's Responsible Minerals Procurement Framework on page 38 of the DNP Group CSR Procurement Guidelines.
DNP Group Guidelines for Procurement of Paper for Printing and Converting
To contribute to the sustainable use of forest resources, in 2012 DNP established these guidelines that stipulate the matters that must be complied with in the procurement of paper for printing and converting, which is one of our main raw materials. Along with this, we have also been collaborating more closely with suppliers such as paper manufacturers and sales companies and are working to procure timber for which legality has been confirmed based on the guidelines, ensure traceability, and increase the percentage of paper that is friendly to forest resources in the overall volume of our paper purchases. In 2021 as well, we confirmed the legality of all paper suppliers.
DNP Group Green Procurement Guidelines for Chemical Substances
In 2004, DNP established the DNP Group Chemical Substance Management Standards and has promoted green purchasing. In addition, in response to the tightening of domestic and overseas regulations to reduce the risks that chemical substances bring to human health and the environment, in 2013 we revised these into the DNP Group Green Procurement Guidelines for Chemical Substances, which we newly defined based on the ideal form of chemical substances. In conjunction, we hold Supplier Information Sessions to explain the risks caused by chemical substances and to convey the need for making responses throughout the entire supply chain. We continuously make efforts to strengthen the management of chemical substances, such as by expanding the scope of controlled substances in November 2021
Participation in Initiatives
The DNP Group empathizes with the initiatives of the United Nations Global Compact’s local network in Japan (Global Compact Network Japan, hereinafter referred to as GCNJ), which was launched in Japan in 2003, and is participating in various subcommittees. Among these, we have participated in the Supply Chain Subcommittee since its inception in 2008 and have been involved in compiling A Vision of Desirable CSR Activity in the Supply Chain (issued in 2013) and An Introduction to Sustainable Procurement－Promoting CSR in the Supply Chain (issued in 2016) and the creation of Japanese-English versions of CSR/Sustainable Procurement Training Toolkit (Lecture & Game) (issued in 2020). Through these subcommittee activities, we are deepening our understanding of CSR procurement and promoting the in-house utilization of training tools.