CSR Management in the Supply Chain

Supply Chain Checks and Audits

Toshiba Group continues to ensure that its suppliers are also committed to improving working conditions and reducing their environmental impacts.

We also believe that in addition to proper management of working hours and wages, ensuring improved communication between workers and managers, and paying attention to occupational health and safety and to the environment in areas around factories will boost employee morale and contribute to an improvement in work efficiency.

Accordingly, Toshiba Group will continue to share its management know-how acquired through experience with suppliers worldwide, particularly those in emerging economies.

Toshiba distributes to suppliers worldwide the Toshiba Group Procurement Policy and the Supplier Expectations to promote understanding of our stance on CSR in procurement.

We also monitor the status of CSR management of our ongoing suppliers at manufacturing sites at the time of quality audits and request improvements and provide guidance as necessary. For new procurement transactions, we confirm conformity with Toshiba Group's procurement and selection policies not only with respect to the goods and services procured, but also suppliers' manufacturing sites, management systems and the state of their operations.

CSR Survey of suppliers

FY2006	Conducted surveys of 100 suppliers whose transactions with Toshiba accounted for a significant proportion. New survey categories such as human rights, labor conditions, and occupational health and safety were included in addition to the previous categories such as quality, the environment and information security.
FY2007	Conducted surveys of 265 principal ongoing suppliers in Asia covering human rights, labor conditions, occupational health and safety, and environmental protection.
FY2008	Conducted on-site audits of some suppliers in Thailand jointly by the internal team of relevant divisions such as CSR, human resources, environment and procurement. While no serious non-compliances were identified, provided instructions with regard to improving H&S management structure and controlling oil leakages at the factory.
FY2009	Conducted on-site audits of some suppliers in Southern China, Indonesia and Malaysia jointly by the internal team of relevant divisions such as CSR, human resources, environment and procurement. While no serious non-compliances were identified, provided instructions with regard to improving H&S management structure and controlling oil leakages at the factory.
FY2010	Conducted CSR-related audits of 17 manufacturing bases of 16 China-based companies to which Toshiba outsources the assembly of finished products under the Toshiba brand. At each site, we performed audit by interacting directly with the employees. With regard to labor conditions, we provided guidance for improving employee welfare. With regard to environmental management, we examined third-party environmental certifications. We also surveyed the companies with regard to their supply chain management.

Items covered by the CSR Survey

Category	Items
Human rights and labor conditions	Prohibition of forced labor Prohibition of inhumane treatment Prohibition of child labor Prohibition of discrimination Appropriate wages Working hours Workers' freedom of association
Occupational health and safety Equipment safety measures	Equipment safety measures Workplace safety Workplace sanitation Occupational accidents and occupational diseases Emergency response Consideration concerning work that is physically onerous Facilities safety and sanitation Employee health management

Major survey items during the audit of outsourced Toshiba-brand manufacturers

Category	Survey items
Status of CSR management at the companies audited	Labor disputes Communication with employees, Labor agreements and working hours, Workplace safety, Employee health conditions, Environmental initiatives such as the acquisition of ISO14001certification
Status of CSR management with regard to the supply chain of the companies audited	Adoption of CSR policy that encompasses consideration for human rights, labor conditions, and the environment; Communication of the CSR policy to suppliers and their status of compliance with the policy; and compliance with laws Regulations concerning plant wastewater and air emissions

CSR Awareness in the Supply Chain

CSR Guidebook Published

We urge our suppliers to promote their CSR and provide necessary support for the same. In August 2010, we held seminars, inviting the managers from 86 key suppliers to explain our management philosophy and procurement policy.

In addition, in order to guide the suppliers in incorporating CSR into their operations, we developed the Toshiba Group Supply Chain CSR Implementation Guidebook* to introduce our policies on management of health and safety and the environment in four languages - Japanese, English, Chinese and Thai. The Guidebook is also available on our corporate website.

* The Toshiba version of the supplier CSR promotion guidebook complying with the Supply-Chain CSR Deployment Guidebook published by Japan Electronics and Information Technology Industries Association (JEITA)

• TOSHIBA Group Supply-Chain CSR Deployment Guidebook (Japanese)(PDF:418KB)
• TOSHIBA Group Supply-Chain CSR Deployment Guidebook (English)(PDF:149KB)
• TOSHIBA Group Supply-Chain CSR Deployment Guidebook (Chinese)(PDF:260KB)
• TOSHIBA Group Supply-Chain CSR Deployment Guidebook (Thai)(PDF:219KB)

Status Survey

Toshiba Group holds seminars on environmental measures, human rights, and occupational health and safety, and conducts a survey on the situation regarding the procurement policy (including self-inspection).

Suppliers participating in seminars and those covered by the survey

Topic	Seminars	Surveys	Field Audit
Human rights and safety	6,385	4,477	910
Environment	15,731	13,155	3,863

(Cumulative data for FY2007-2010) (Unit : No. of supplier companies)

Actions on Suppliers in the Event of Breach of the Procurement Policy

If a supplier violates the procurement policy, first of all, 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.

Suppliers subject to guidance & support and suspension of transactions

Topic	Support	Suspension of transactions
Human rights and safety	997	8
Environment	3,200	34

(Cumulative data for FY2007-2010) (Unit:No. of supplier companies)

Examples of supplier guidance and instructions (FY2010)

Guidance on Environmental Activities	Compliance with water discharge standards from the water outlet facilities Proper management of substances that lead to environmental pollution Segregation of storage with regard to hazardous and non-hazardous substances, establishment of rules for the environmental management of storage facilities
Guidance on Human Rights and Occupational Health & Safety	Workplace climate Compliance with safe operating practices, dealing with emergencies, education on health maintenance Complying with safe and proper methods at the time of unloading of goods

EICC Membership

In FY 2011, Toshiba joined EICC (Electronic Industry Citizenship Coalition) as an applicant member, supporting the goals and vision of EICC.
We are committed to ensure that our suppliers follow sound CSR practices.
For more information, please visit: Toshiba´s Commitment to EICC

Toshiba Group Conflict Mineral Policy

In line with the EICC code of conduct, Toshiba Group will make efforts to manage its supply chain.
In November 2011, we developed Toshiba Group Conflict Mineral Policy in order to address conflict minerals.

Green Procurement

Adhering to its Basic Policy for the Environment, Toshiba Group is implementing environmentally conscious approaches in all business processes and products, focusing on creation of new value in harmony with the Earth.

It is necessary to perform comprehensive assessment of environmental impacts of our products throughout their life cycles from production and usage through to recycling and final disposal. Toshiba Group is promoting green procurement as a measure to minimize environmental impacts in the production phase.

The objective of the Green Procurement Guidelines established in 1999 is to prioritize procurement of products, parts and materials with minimal environmental impacts from suppliers who are proactively promoting environmental protection. In order to promote business such that that environmental impacts and risks are reduced, such as through reduction in the use of hazardous chemical substances, initiatives throughout the entire supply chain are necessary. For that purpose, the cooperation of suppliers and our business partners is indispensable.

Toshiba thoroughly revised the Green Procurement Guidelines in 2011 to address emerging needs.

In our endeavor to contribute to the emergence of a sustainable society, we request our suppliers' cooperation in the promotion of green procurement. Also, we assess suppliers' environmental performance and conduct surveys on the presence of chemical substances in procured items.

• Green Procurement Guidelines (English, Japanese and Chinese)

Selection/Evaluation of Suppliers based on the Level of Greenness

With regard to the environmental performance, we conduct a voluntary assessment of the level of greenness of suppliers (Toshiba standards) based on the environmental standard ISO 14001. In selecting suppliers, we accord priority based on the ranks of the suppliers and also urge them to improve their level of greenness.

The level of greenness of suppliers during FY2010 was 93.9%
(includes Rank S and Rank A)

• Rank S (excellent)
• Rank A (good)
• Rank B (requires guidance)
• Below Rank B (requires guidance)

For Stationery and Other Office Supplies

With regard to procurement of stationery and other office supplies, Group-wide companies strive to select procurement items that have lower environmental impacts. For example, environmentally conscious products such as Eco Mark certified products, products made of recycled materials, recyclable products, and products that can be separated for collection are registered as environmentally recommended products for procurement by Toshiba Group.

We are implementing green procurement for personal computers, copiers, copier paper, stationery and other office supplies.