Promote Sustainable Procurement

Toshiba Group promotes, together with its suppliers, activities to improve corporate value as well as the value of its customers through sustainable procurement initiatives such as those that are in full compliance with laws, regulations, and social norms, and that consider human rights, occupational health and safety, and the environment.
We request suppliers to agree with the Toshiba Group Procurement Policy and to put it into action at their companies including supply chains, and also evaluate their CSR and sustainability initiatives. We will also provide our procurement employees with training on sustainable procurement, and educate them about important CSR and sustainability issues in the supply chain, such as human rights, labor, health and safety, and the environment.

Toshiba Group procures a variety of raw materials and resources from suppliers all around the world.
In terms of the composition ratio of our procurement by business sector (monetary value) for FY2022, energy and infrastructure accounts for 51%, electric devices account for 27%, and others account for 22%. By region, Japan accounts for 70%, Asia (including China and India) accounts for 29%, and Europe and others account for 1%.
In our efforts to promote sustainable procurement activities throughout our supply chain, Toshiba Group takes a risk-based approach that rates the importance of major suppliers with whom we have recurring business with, taking into account factors particular to the business sector and region.

Toshiba Group appropriately implements local procurement of materials, components and equipment, etc. based on the attributes of the items produced and the environment in which they are produced. Centered on production bases in each country, and also taking advantage of the International Procurement Offices (IPO), we make efforts to promote optimal procurement, including local procurement, while also aiming to co-exist with local communities.

Toshiba Group promotes sustainable procurement activities with the aim of improving both corporate value and the value of its customers, while also striving to build sound partnerships with suppliers.
We request all our suppliers, who play an important role in the Toshiba Group companies’ production and services, to consent to and put into practice the Toshiba Group Procurement Policy. 

The Toshiba Group Procurement Policy was established in accordance with the United Nations Global Compact, in which the Group participates, and the RBA Code of Conduct, which it observes. The Group clearly states, as conditions for selecting business partners, that they must agree with and execute “compliance with laws and regulations, and social norms,” and “consideration for human rights and the occupational safety and health of workers.” The Group also requests suppliers to engage in the “appropriate management of working hours (compliance with laws and regulations, and consideration of international standards, to prevent excessive working hours and to provide reasonable holidays)” and the “payment of appropriate wages (payment at a level above the minimum wage under applicable laws and regulations; wages sufficient to cover the necessities of life (a living wage)).”  In addition, the Toshiba Group Procurement Policy is translated into English, Chinese and Thai to complement the Japanese version, and whenever the contents of the said policy are revised in keeping with social trends, we inform all our suppliers both inside and outside Japan.

In addition to this Procurement Policy, we have set the Toshiba Group Green Procurement Guidelines in order to address environmental issues and the Toshiba Group Responsible Minerals Sourcing Policy in order to address responsible minerals sourcing. With regards to respect for human rights, in March 2022, we established a new Toshiba Group Human Rights Policy(347KB). In response to the establishment of this policy, we revised the Toshiba Group Procurement Policy  with the aim of clarifying the criteria for selecting suppliers with reference to ESG and to update requests to suppliers.

We also have the Standards of Conduct for Toshiba Group for our Group officers and employees. Our corporate policy is to fulfill our CSR through fair trade and compliance with laws, regulations and social norms, as well as to build relationships of mutual understanding and trust together with our suppliers.

• Respect for Human rights
  
• Toshiba Group Human Rights Policy
• Toshiba Group Procurement Policy
• Toshiba Group Green Procurement Guidelines
• Toshiba Group Responsible Minerals Sourcing Policy
• Standards of Conduct for Toshiba Group 3. Procurement

In April 2020, Toshiba Group established an independent team specializing in sustainable procurement activities within the Procurement Division at Toshiba’s Headquarters. To promote sustainable procurement activities in areas such as human rights, labor, health and safety, and the environment, the specialized team collaborates, through the Sustainability Strategy Committee, with related divisions such as sustainability management, the environment, and each business division. In FY2021, we identified the promotion of sustainable procurement activities as a material issue for Toshiba Group, and set KPIs related to these activities at the Sustainability Strategy Committee.
We secure a budget each year to implement related initiatives, and cooperate with the sustainability management structure in promoting our sustainable procurement activities, and, via our structure for promoting sustainable procurement activities, we develop measures and provide education to Toshiba Group companies.
The Executive in charge of Procurement reports to the Board of Directors as appropriate, and receives supervision and advice accordingly.

• Sustainability Management

Training on the Standards of Conduct for Toshiba Group, the Toshiba Group Procurement Policy, and sustainable procurement is included in our training programs for employees at all organizational levels, including the training program for new employees and for transferees. As part of these level-based programs in FY2022, we provided sustainable procurement education to approximately 40 procurement employees of Toshiba Group.

In order to fulfill CSR in the areas of labor, health and safety, the environment, and ethical standards throughout the supply chain, Toshiba takes measures in accordance with the spirit of the RBA Code of Conduct. 

We request key suppliers to carry out CSR self-assessments each year to check compliance with the RBA Code of Conduct and to check how they implement initiatives regarding compliance with laws, regulations and social norms, human rights, occupational health and safety, environmental conservation, and ethics. Based on the assessment results, we provide guidance to individual suppliers in accordance with their risk levels, and request that they make improvements.

• RBA Membership

Toshiba participates in CDP, an international non-profit organization that is highly influential in the environmental field, and BSR (Business for Social Responsibility), an international non-profit organization for promoting activities of sustainability, and is promoting sustainable procurement activities after receiving assessments regarding the environment and human rights. As a member of JEITA Responsible Minerals Trade Working Group, a member of JEITA CSR Committee, and a regular member of JaCER, we also engage in collaborative activities with these organizations.

• Participation in CDP
• Participation in BSR
• JEITA Responsible Minerals Trade Working Group (Japanese) 
• JEITA CSR Committee (Japanese)

Since FY2021, for the purpose of strengthening our efforts to tackle ESG issues across the entire supply chain, we have been conducting sustainable procurement surveys of suppliers’ approaches to human rights, occupational health and safety, environment, ethics and BCP by using a risk-based approach. In FY2022, from the work locations of total 12,622 suppliers, we narrowed down the targets of the survey to countries and regions listed in external reference sources such as the conflict-affected and high-risk areas list issued by Japan and the European Union and the regional information concerning risk to human rights referenced in the United Nations Environment Programme Finance Initiative (UNEP FI)’s Human Rights Guidance Tool. We conducted risk assessments on approximately 5,000 suppliers on the issues of human rights, labor, the environment, and laws and regulations. For the approximately 1,600 suppliers whose responses confirmed the presence of risks, we created and distributed documents outlining the preferable corrective action based on international standards for each question, and undertook corrections and training. We also conducted direct interviews with some suppliers to ascertain the facts, and are providing guidance on how they might remedy the situation.

These surveys confirmed the employment situation of foreign workers at suppliers' facilities (particularly technical trainees in Japan) and whether the location of the supplier's facilities is in a high-risk country or region (lacking social protection, etc.), and asked questions about discrimination, equal opportunities, freedom of association and collective bargaining rights, child labor and youth workers, forced labor, and occupational health and safety to understand human rights and occupational health and safety risks.

Toshiba Group strives to establish partnerships with our suppliers founded on mutual trust. We are working to improve these partnerships by supporting our suppliers and organizing awareness-raising activities. We do this so that our suppliers can provide a reliable supply of high-quality, appropriately priced goods that give consideration to human rights, labor conditions, health and safety, and the environment. For each supplier whose responses to the Sustainable Procurement Survey confirmed the presence of risks, we created and distributed documents outlining the preferable corrective action based on international standards for each question, and undertook corrections and training. We also conducted direct interviews with some suppliers to ascertain the facts, and are providing guidance on how they might remedy the situation.

In addition, in the CSR assessment to confirm compliance with the RBA Code of Conduct, we conducted direct dialogue with one of our newly surveyed suppliers, explained the key points of the code of conduct, and provided feedback on the assessment results and guidance for improvement.

If a supplier violates the standard for procurement transactions, we request the supplier to implement remedial measures and provide guidance and support as necessary. If the remedial measure is deemed to be unsatisfactory, we suspend transactions with the supplier. Based on the results of the human rights, occupational health and safety, and environment surveys conducted as part of monitoring at site in FY2022, we provided guidance and support to 16 suppliers on human rights issues, 204 suppliers on occupational health and safety issues, and 103 suppliers on environment issues. (the figures are cumulative numbers of Toshiba Group’s suppliers).

• Conflict-free certification: A system that has a third-party organization certify that an operator does not use conflict minerals (conflict free).

Toshiba Group has established a whistleblower system for suppliers and business partners called Clean Partner Line, as a point of contact for our suppliers to tell us about issues or concerns regarding persons associated with the Toshiba Group. Personal information on whistleblowers, without the whistleblower’s consent, is not disclosed to anyone other than the Clean Partner Line staff. Also, what is reported by whistleblowers is handled based on strict procedures, with care taken not to treat whistleblowers and their companies unfavorably for whistleblowing. We notify our business partners of this system and request that they make use of it. 2 reports were made in FY2022, and for both cases, we conducted an investigation cooperating with related divisions. We issue a directive to make improvements or a warning for any inappropriate or suspicious activity discovered in business transactions. 
We also participated in FY2021 in a review meeting of the JEITA CSR Committee for discussion of the establishment of the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER) to respond to human rights violations, among others, in the supply chain. In FY2022, we have joined the Engagement and Remedy Platform operated by JaCER as a regular member and started to receive complaints and grievance reports on business and human rights issues.

Headed by the executive in charge of sustainability, the Corporate Responsible Minerals Sourcing Management Committee, consisting of related corporate divisions, promotes activities in accordance with the Toshiba Group Responsible Minerals Sourcing Policy. Each Group company appoints a person and office in charge of responsible minerals sourcing management, who attend liaison meetings organized by the Corporate Management Committee and make use of information on the in-house website to develop comprehensive initiatives.

We conduct surveys of Toshiba Group suppliers to monitor their use of tin, tantalum, tungsten, gold (3TG), and cobalt and the smelters they deal with using templates, such as the Conflict Minerals Reporting Template (CMRT), provided by the RMI.
We surveyed around 930suppliers (cumulative number) that might use 3TG and 240 suppliers (cumulative number) that might use cobalt in FY2022.

• JEITA Responsible Minerals Trade Working Group (Japanese)

In order to promote the practice and awareness of responsible minerals sourcing, we affiliate actively with industry organizations and public-private partnership projects, as well as engaging in communication with NGOs.

• JEITA Responsible Minerals Trade Working Group (Japanese)

Toshiba Group promotes green procurement as a part of our environmental considerations across the entire supply chain.

We distribute Toshiba Group Green Procurement Guidelines to suppliers, which present Toshiba Group's basic concept concerning green procurement and the specific content of our requests to suppliers. Based on these guidelines, we endeavor to preferentially procure products, parts, materials, and services that have a low environmental impact from suppliers who actively promote environmental management.

Toshiba Group Green Procurement Guidelines are revised as necessary in response to global trends or changes in Toshiba Group’s environmental policy. In March 2022, we updated the guidelines to reflect our long-term environmental vision, Environmental Future Vision 2050, and the content has since been enhanced with a focus on our response to climate change.

We confirmed the status of suppliers' compliance with the guidelines through Evaluation of Environmental Management of our major suppliers. Specifically, in addition to sharing Toshiba Group's environmental management in line with Environmental Future Vision 2050, we conducted a survey and assessment of suppliers' efforts with regard to the key measures of the vision, namely, "response to climate change," "response to the circular economy," and "consideration of ecosystems." If any issues are identified with suppliers' efforts, we provide guidance for improvements.

In selecting suppliers,we give priority to suppliers with higher assessment ranks, aiming to continue to promote green procurement in collaboration with them.

In FY2022, we conducted Greenhouse Gas (GHG) Emissions Survey as a supplementary survey to Evaluation of Environmental Management, and started verification studies to strengthen partnerships with suppliers and improve Toshiba Group's "Scope 3 Category 1" calculation accuracy.

• Toshiba Group Green Procurement Guidelines
• Environmental Future Vision 2050
• Response to Climate Change

With regard to procurement of office equipment, stationery and other office supplies, Group companies strive to select procurement items that have lower environmental impacts. For example, environmentally conscious products such as Eco Mark certified products are registered as environmentally recommended products for procurement by Toshiba Group. We are implementing green procurement for personal computers, copiers, copier paper, etc.

In response to COVID-19, we have taken necessary countermeasures in collaboration with suppliers to ensure supply in order to minimize the impact on business. Specifically, we assess risks in corporate activities and logistics in regions where the infection is spreading to instigate measures to minimize the impact on our business.

Toshiba Group always take into account geopolitical risk and seeks to conduct procurement activities in an optimal manner. With regard to the situation in Ukraine, we are ascertaining the risks of the procurement from Russia, and are working to minimize the impact on our business by ensuring alternative suppliers.