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CSR Management in the Supply Chain

In order to fulfill CSR in regards to human rights, labor, and the environment in cooperation with suppliers, Toshiba Group continues to ensure that its suppliers are also committed to improving working conditions and reducing their environmental impact.

Medium- to Long-term Vision

Thorough Implementation of Toshiba Group Procurement Policy

Quantitative Target

Percentage of suppliers agreeing to the Toshiba Group Procurement Policy:
100%*
* New suppliers from April 2015 onward

FY 2014 Achievement

Percentage of suppliers consenting for the Toshiba Group Procurement Policy

Target100%  

Achievement99%

Future Challenges and Approaches

We will continue to request that new suppliers consent to the Toshiba Group Procurement Policy, and to strengthen our measures to monitor and support suppliers’ compliance with the policy.

We will also educate our procurement employees about important CSR issues, such as compliance and handling conflict minerals, so that they can instruct and support our suppliers.

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Toshiba Group’s Supply Chain

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, social infrastructure accounts for 43% of our procurement costs, while lifestyle products account for 30%. By region, overseas suppliers account for 67% of the total expenditure.

In our efforts to fulfill our CSR throughout our supply chain, Toshiba Group takes a risk-based approach that gives importance to suppliers with whom we have a continuing business with, and that takes into account factors particular to the business sector and region.

Procurement Component Ratio by Business Segments and Regions (Internal Japan/overseas)

Procurement Component Ratio by Business Segments and Regions (Internal Japan/overseas)

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Toshiba Group Procurement Policy

Toshiba Group strives to build sound partnerships with suppliers through fair trading in compliance with procurement-related laws and regulations.

We established the Toshiba Group Procurement Policy in February 2005, in order that these suppliers, who play important roles to provide products and services of Toshiba Group companies, may better understand the Group’s policy regarding procurement, and cooperate with our promotion of CSR management. Since then, we have been asking our suppliers to comply with the Policy while revising its contents (see below table) as necessary in response to social changes.

In October 2014, we expressly requested the promotion of activities that are in line with the principles of the United Nations Global Compact (UNGC), and the EICC (Electronic Industry Citizenship Coalition) Code of Conduct, initiatives of which Toshiba is a member. We informed our domestic and overseas suppliers about this revision.

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 Conflict Mineral Policy in order to address conflict minerals. We also have the Toshiba Group Standards of Conduct 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.

The History of the Revision of the Toshiba Group Procurement Policy
Time Contents
Feb 2015 We established the Toshiba Group Procurement Policy, and requested that our domestic and overseas suppliers comply with laws, regulations and social norms, give proper consideration to the environment etc.
May 2008 Revision We expressly informed our suppliers of our policy on giving consideration to human rights and OHS, and requested that they apply the policy’s standards to their own procurement activities.
May 2012 Revision
  • We declared that we give priority consideration to suppliers who comply with laws, regulations and social norms and whether they take account of human rights, when selecting new suppliers and renewing contract.
  • We requested that our suppliers comply with our policy to prohibit bribery to any stakeholders (taking into account international anti-corruption regulations such as the UK’s Bribery Act), human trafficking or slavery (taking into account the California Transparency in Supply Chains Act in the USA), and the use of conflict minerals (taking into account Dodd–Frank Wall Street Reform and Consumer Protection Act).
Oct 2014 Revision In the Procurement Policy, we expressly requested the promotion of activities that are in keeping with the principles of the United Nations Global Compact (UNGC) and the EICC (Electronic Industry Citizenship Coalition) Code of Conduct Toshiba is a member of these initiatives.

Toshiba Group Procurement Policy

Toshiba Group Green Procurement Guidelines

Toshiba Group Conflict Mineral Policy

Toshiba Group Standards of Conduct 3. Procurement

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Cooperation with Industry Organizations

In June 2011, Toshiba joined the Electronic Industry Citizenship Coalition (EICC), the electronics industry’s CSR promotion organization. In order to fulfill CSR for labor, occupational health and safety, the environment, and ethical standards throughout the supply chain, we take measures in accordance with the spirit of the EICC Code of Conduct.

In FY2014, we held the seminars for our suppliers in Japan and in China by inviting external lecturers. In the seminars, we explained Toshiba Group’s policy on CSR in the supply chains and its status of the implementation as well as CSR global standard to share the same understandings.

We also requested our suppliers in Japan and overseas to perform CSR self-checks in accordance with the EICC Code of Conduct and confirmed each company’s implementation status, in terms of compliance with laws and regulations, human rights, occupational health and safety, and consideration on environment.

EICCのロゴマーク

EICC seminars in China, Nov 2014 EICC seminars in China, Nov 2014

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Promotion of the Supply Chain Management

In April 2007, Toshiba Group set up an organization dedicated to promoting CSR procurement within the procurement department at Toshiba’s Head Office, which works to promote fair dealings with all our suppliers as well as CSR management in the supply chain.

The organization coordinates with various business divisions and related divisions such as the CSR office and the Environment office.

Training procurement employees

Compliance training of various types, such as training on the Toshiba Group Standards of Conduct and the Toshiba Group Procurement Policy, is included in our training programs for procurement personnel at all organizational levels, including the training program for new employees.

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Thorough Implementation measures based on the Toshiba Group Procurement Policy and its monitoring

Thorough Implementation measures based on the Procurement Policy

We request suppliers to consider CSR in accordance with Toshiba Group Procurement Policy. In FY2014, we revised the Policy and included expectations for our suppliers to act in accordance with the UN Global Compact and the EICC Code of Conduct and requested some 10,000 suppliers (cumulative numbers*) to abide by this revised content. 99% of the companies that responded by the end of March 2015 consented. We will keep trying our best to explain the policy to our suppliers including new companies and receive the consents from all of them.

  • * As Toshiba Group companies conduct surveys based on each contract, we count only one contract in the case multiple contracts are concluded with one supplier. Additionally, the company numbers are approximate due to there being commercially sensitive information.

Toshiba Group Procurement Policy

The Third-Party Assurance (PDF:90KB)

Monitoring

Toshiba Group monitors the status of CSR management in the supply chains that have ongoing businesses at manufacturing sites at the time of quality audits and request improvements and provides guidance as necessary. For new procurement transactions, we check the supplier’s conformity with Toshiba Group's procurement and selection policies, its manufacturing sites and management structure, and whether it complies with laws and regulations on environment, human rights, and occupational health and safety.

Toshiba Group holds briefings to explain to suppliers its policies on the environment, human rights, and occupational health and safety. We also conduct supplier surveys to monitor their performance in accordance with the Toshiba Group Procurement Policy (including self-assessment) at each business site.

Suppliers participating in briefings and those covered by the survey
(FY2014, Toshiba Group, Cumulative numbers)
Topic Briefings Surveys
(including self-assessment)
Field Audit
  • Human rights
  • Safety
1,929 1,563 176
  • Environment
3,979 5,394 638
Total 5,908 6,957 814

Promotion of CSR Management in Supply Chain (Toshiba Group, Cumulative numbers)

Promotion of CSR Management in Supply Chain (Toshiba Group, Cumulative numbers)

The Third-Party Assurance (PDF:90KB)

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

If a supplier violates the procurement policy, 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
(FY2014, Toshiba Group, Cumulative numbers)
Topic Guidance and Support Suspension of transactions
  • Human rights
  • Safety
14 3
  • Environment
878 1
Examples of supplier guidance and instructions (FY2014)
Environmental Activities
  • Request to set up a target on the reduction of industrial waste and energy serving
  • Guidance on improvement of rules and application methods
Human Rights and Occupational Health & Safety
  • Guidance on the corrective actions for dangerous working conditions
Major survey items during the audit of outsourced Toshiba-brand manufacturers
Category Survey items
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 ISO14001 certification
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;
  • Regulations concerning plant wastewater and air emissions

The Third-Party Assurance (PDF:90KB)

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Partnerships with Suppliers

Toshiba Group strives to build with our suppliers partnerships 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 labor conditions, OHS and the environment.

Activity Example: Initiatives at Toshiba Information Equipment (Philippines), Inc.

Auditing of suppliers Auditing of suppliers

In 2002, Toshiba Information Equipment (Philippines), Inc. (TIP), a production base for hard disk drives, became the first Asian company to acquire SA8000*1 certification. TIP not only objectively listens to its employees’ opinions in order to improve its work environment but has also spread this initiative to its suppliers. In order to enhance CSR management at its suppliers, TIP continues to implement monthly audits (12 suppliers per year). To date, a total of 137 audits have been conducted since 2005, when such audits began. TIP confirms the status of CSR initiatives at suppliers in accordance with the Toshiba Group Standards of Conduct, Toshiba Group Procurement Policy, SA8000 and OHSAS18001*2 standards, EICC Code of Conduct*3, and other guidelines. If suppliers fail to satisfy these standards, TIP demands corrective actions be taken and provides guidance and support for improvement.

Major problems identified for improvement during audits include those related to labor conditions (e.g., working hours and holidays) as well as health and safety management in the workplace. Going forward, TIP will continue to support its suppliers in promoting CSR initiatives so as to establish long-term partnerships through auditing and guidance.

  • *1 SA8000 refers to a set of international standards established by Social Accountability International for evaluating work environments.
  • *2 OHSAS18001 (Occupational Health and Safety Assessment Series) is a set of standards for identifying occupational health and safety risks as well as measures to cope with the same, and it also serves to clarify where responsibilities lie.

Activity Example: Participating in the supplier CSR promotion program of the department of labor and employment in the Philippines

Training for a supplier Training for a supplier

Toshiba Information Equipment (Philippines), Inc. (TIP) is promoting the KAPATIRAN supplier partnership program, which was introduced in 2011 by the Philippine Department of Labor and Employment. This program aims to create a system in which large companies (“Big Brothers”) guide and help small and medium enterprises (“Small Brothers”) to be compliant with general labor standards including occupational safety and health standards. TIP was the country's first electronic company that participated in the program.

Based on the program, TIP selects 10 companies from among its suppliers each year and educates and supports these companies for a period of one year. When the program is over, TIP submits a report to the Department of Labor and Employment. In addition to on-site training, TIP also invites external instructors for a variety of training programs. Through this program TIP support its suppliers in promoting CSR management and also establishes strong partnerships with them.

Highlights of CSR Activities in 2014: Materialities and CSR management in the supply chain Annual topics

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Addressing the Conflict Minerals Issue

Since Section 1502 on conflict minerals of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) enacted in January 2013, companies listed in American Exchange are required to report on the use of conflict minerals mined in the Democratic Republic of the Congo and its adjoining countries. Toshiba Group is not a listed company, however, as a part of the supply chain of listed companies, is obliged to investigate and report to our customers.

Prior to the enactment of the Act, Toshiba Group organized an internal system to address conflict minerals issues, and established the Toshiba Group Conflict Mineral Policy and publicized it on its website in October 2011. For humanitarian reasons, Toshiba Group’s policy prohibits the use of raw materials such as tin, tantalum, tungsten, and gold mined in the Democratic Republic of the Congo and its neighboring countries which violate human rights.

Toshiba Group Conflict Mineral Policy

We are developing and implementing a policy prohibiting use of tin, coltan, wolframite, tantalum, tungsten*1, and gold, whose extraction or trade supports conflict in the Democratic Republic of Congo or adjoining countries, and/or contributes to inhumane treatment, including human trafficking, slavery, forced labor, child labor, torture and war crimes in the region.

  • We will manage our supply chain appropriately in accordance with the OECD (Organisation for Economic Co-operation and Development) Due Diligence Guidance (PDF:3.5MB) for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
  • We will carry out our due diligence with our supply chain using the EICC-GeSI*2 Conflict Minerals Reporting Template (CMRT) developed by EICC and GeSI.
  • Once a validated supply chain is established through initiatives such as full-fledged smelter verification under EICC-GeSI’s Conflict-Free Smelter (CFS) Program or development of a mineral tracing program, we will procure minerals through such validated supply chain.
  • Our efforts are not intended at altogether banning procurement of minerals from the DRC and adjoining countries but to assure sourcing from responsible sources in the region.

We request our suppliers to cooperate with us in our efforts to assure procurement of non-conflict minerals in accordance with the Toshiba Group Conflict Mineral Policy.

  • *1 Derivatives of cassiterite, coltan and wolframite
  • *2 Global e-Sustainability Initiative (an initiative for achieving integrated social and environmental sustainability through ICT)

Toshiba Group’s Promotion Structure for the Use of Conflict-Free Minerals

Headed by an Executive Officer in charge of CSR, the Conflict Minerals Management Committee consisting of related corporate divisions promotes activities in accordance with the Toshiba Group Conflict Mineral Policy Guidelines. Each in-house company appoints a person responsible for conflict minerals and they share information at the In-house Conflict Minerals Management Committee meetings.

Toshiba Group’s Promotion Structure for the Use of Conflict-free Minerals

Toshiba Group’s Promotion Structure for the Use of Conflict-Free Minerals

Conflict Minerals Survey

In FY2011, we conducted a survey of Toshiba Group suppliers on their understanding of conflict minerals and the use of them as well as on details about the smelters. In June 2013, we started a survey using EICC/GeSI Conflict Minerals Reporting Template (CMRT). We surveyed 2,617 suppliers that might use 3TG* in FY2014.

A yearly briefing session on Conflict Minerals Survey for suppliers A yearly briefing session on Conflict Minerals Survey for suppliers

At a yearly briefing session on Conflict Minerals Survey for suppliers, we explain about the current situation surrounding the conflict minerals issue, introduce some useful tools for the survey, notify some changes in the reporting template and request them to cooperate in the survey. In FY2014 some 300 companies participated both in Japan and overseas.

  • * Tin, tantalum, tungsten, and gold

Cooperation and communication with external organizations

In order to solve the issue of conflict minerals, and to promote the practice and awareness of conflict-free procurement, we actively join industry organizations and public-private partnership projects, as well as engaging in communication with NGOs.

Key examples of external cooperation and dialogues regarding conflict minerals
Organizations and Projects related Toshiba Group Activities
EICC*1 Joined in June 2011
CFS*2 Participate in meetings and workshops as a member
JEITA*3
Responsible Minerals Trade Working Group
Joined in November 2011 and promote the cooperation with industry organizations.
Joined the Conflict Free Sourcing Working Group within the Responsible Minerals Trade Working Group in May 2014, and has worked to promote and raise awareness of conflict-free minerals procurement in cooperation with the automobile and electrical industries of Japan.
PPA*4 Contributing to efforts to cut off sources of funding for armed groups and provide economic support to the Democratic Republic of the Congo and its neighboring countries since November 2011.
US NGO Enough Project*5 and Japanese NGO A SEED JAPAN*5 Exchanged views in February 2012
US NGO Responsible Sourcing Network*5 Joined a CSR mission to the U.S. organized by the CBCC*6 and held dialogues in February 2014
Japanese NGO A SEED JAPAN Exchanged views in January 2015
  • *1 Electronic Industry Citizenship Coalition
  • *2 Conflict Free Sourcing Initiative
  • *3 Japan Electronics and Information Technology Industries Association
  • *4 The Public-private Alliance for Responsible Minerals Trade, a public-private project advocated by the U.S. government.
  • *5 NGOs working on Conflict Minerals issues
  • *6 Counsel for Better Corporate Citizenship

JEITA Responsible Minerals Trade Working Group

Toshiba Group Conflict Minerals Initiatives (PDF:178KB)

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Green Procurement/Green Purchase

Green Procurement

Toshiba Group promotes green procurement as a part of our environmental considerations in the manufacturing processes. Following our Green Procurement Guidelines established in 1999, we endeavor to procure products, parts and materials that have a low environmental impact from suppliers who actively promote environmental protection. We revise the Green Procurement Guidelines whenever necessary in order to respond to circumstances such as stricter regulations on chemicals contained in products. We published Ver.4.1* of our Green Procurement Guidelines in February 2015 by adding Endosulfan, hexabromocyclododecane, certain polycyclic aromatic hydrocarbons, 4-phthalate ester, and the Rank B substances (substances requiring control) to the list of environment-related substances.

We ask our suppliers for their understanding and cooperation regarding green procurement, evaluate their environmental performance, and conduct inquiries and assessments of chemical substances contained in the goods procured.

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.

Green Procurement Guidelines (English, Japanese and Chinese)

The level of greenness of suppliers during FY2014 was 97.5% (includes Rank S and Rank A)

The level of greenness of suppliers during FY2014 was 97.5% (includes Rank S and Rank A)
  • Rank S (excellent)
  • Rank A (good)
  • Rank B (requires guidance)
  • Below Rank B (requires guidance)

Green Purchase: Stationery and Other Office Supplies

With regard to procurement of 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, 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.

Green Procurement Guidelines (English, Japanese and Chinese)

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Reducing CO2 Emissions in the Supply Chain

Toshiba Group endeavors to keep track of and calculate the total amount of GHG*1 emissions throughout the supply chain. We use a calculation method based on the guidelines released by the Ministry of the Environment*2, calculate the amount of emissions in every category, then compare the values with the previous year’s by category.

We consider the promoting of effective measures throughout the life cycle to be important. We do this by ascertaining the amount of emissions used in such a way, quantitatively and by category.

  • *1 CO2, CH4, N2O, HFCs, PFCs, SF6
  • *2 Basic Guidelines on Accounting for Greenhouse Gas Emissions Throughout the Supply Chain

Environmental Activity: Ensuring transparency of supply chain GHG emissions from corporate activities in all categories

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