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Sustainability

CSR Management in the Supply Chain

[SDGs] 8 DECENT WORK AND ECONOMIC GROWTH[SDGs] 12 RESPONSIBLE CONSUMPTION AND PRODUCTION[SDGs] 13 CLIMATE ACTION[SDGs] 16 PEACE, JUSTICE AND STRONG INSTITUTIONS

In order to fulfill CSR in regards to human rights, labor, and the environment in cooperation with suppliers, Toshiba Group continues to promote CSR activities throughout the supply chain.

Medium- to Long-term Vision

Contributing to solving social issues in our supply chain through appropriate procurement transactions

  • Full notification of our procurement policy to our suppliers
  • Obtaining consent for the Toshiba Group Procurement Policy from new suppliers

    100%of our new suppliers

  • Keeping track of supplier activities, and advising on improvement

FY2019 Achievement

  • Holding briefings for suppliers:
    • Explaining the Toshiba Group Procurement Policy
    • Briefing on conflict minerals
  • Surveys of suppliers and providing instructions for improvement:
    • Conducting CSR Self-Assessment (RBA Self-Assessment Questionnaire) and providing individual guidance based on the results
    • Conducting a conflict minerals survey and providing individual guidance based on the results
    • Conducting a supplier environmental conservation survey
  • Information exchange and discussion with experts toward resolution of CSR issues:
    • Participating in RBA member meetings
  • Response to COVID-19
    • In order to ensure business continuity and fulfill our social responsibilities, we conducted risk assessments of suppliers in Japan and overseas based on information we collected, and implemented measures to minimize the impact on business.

Future Challenges and Approaches

We will continue to request that new suppliers' consent and practice 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 responsible mineral sourcing, human rights, occupational health and safety (OHS), and environment 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 (monetary value), energy and infrastructure accounts for 51%, electric devices account for 29%, and others account for 20%. By region, domestic suppliers account for 73% and overseas suppliers account for 27% 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 Segment and Region (Japan/overseas)
(FY2019, monetary value base)

Procurement Component Ratio by Business Segment and Region (Japan/overseas) (FY2018, monetary value base,)

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 using the International Procurement Office (IPO), we make efforts to promote optimal procurement, including local procurement.

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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 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 policy is translated into English, Chinese and Thai to complement the Japanese, and whenever the contents of the said policy are revised in keeping with social conditions, 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 conflict minerals. 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.

The History of the Revision of the Toshiba Group Procurement Policy
Time Contents
Feb 2005 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 Responsible Business Alliance (RBA)* Code of Conduct. Toshiba is a member of these initiatives.
  • * EICC changed its name to RBA in October 2017.

Toshiba Group Procurement Policy

Toshiba Group Green Procurement Guidelines

Toshiba Group Responsible Minerals Sourcing Policy

Standards of Conduct for Toshiba Group 3. Procurement

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Cooperation with Industry Organizations

In order to drive forward its CSR management in the supply chain in accordance with global standard, in June 2011, Toshiba joined the RBA, 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 RBA Code of Conduct.

In January 2017, we established RBA Japan Network together with RBA membership companies in Japan. The Network builds awareness and understanding of the RBA Code of Conduct through translation support and outreach meetings. It also conducts activities to resolve common issues. In October 2019, we participated in an RBA membership meeting held in the United States where we learned about the latest global trends. To create a responsible supply chain, we exchanged information and held discussions with experts.

We request Toshiba Group companies' suppliers to carry out CSR self-assessment each year in accordance with the RBA Code of Conduct depending on their respective industries and sizes, thereby checking how initiatives are being implemented regarding compliance with regulations and social norms, human rights, occupational health and safety, environmental conservation, and ethics. Based on assessment results, we provide guidance to individual suppliers in accordance with their risk levels, and request that they make improvements.

RBA

Cooperation with Industry Organizations

RBA Membership

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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.

Toshiba Group CSR procurement promotion structure

Toshiba Group CSR procurement promotion structure

Training Procurement Employees

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

Response to COVID-19 in the Supply Chain

In order to ensure business continuity and fulfill our social responsibility, we collected information from suppliers in the supply chain in Japan and overseas concerning COVID-19 from an early stage to determine risk, and guarantee supply by taking the necessary countermeasures in collaboration with suppliers, and minimize the impact on business.

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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 RBA Code of Conduct and requested some 10,000 suppliers (cumulative numbers*) to abide by this revised content, and got consensus from them. In FY2019, Toshiba Group selected approximately 3,000 companies as new suppliers based on the Policy for Selecting Suppliers stipulated in the Toshiba Group Procurement Policy. The Toshiba Group Procurement Policy which includes encouraging secondary suppliers to also adhere to them was distributed and explained to new suppliers. Toshiba Group request them to agree to the policy.

  • * 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

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 requests 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.
That surveys conducted to suppliers which supply products and components whether they consist Toshiba brand products or not from FY2019.

Suppliers participating in briefings and those covered by the survey
(FY2019, Toshiba Group, Cumulative numbers)
Topic Participation in briefings Surveys* On - site Audit*
Human rights/Safety 6,953 6,055 920
Environment 3,790 6,128 395
Total 10,743 12,183 1,315

* The survey includes self-inspections using the RBA SAQ (Self-Assessment Questionnaire), third-party audits, and surveys/audits using our own standards.

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

If a supplier violates the standard of transaction, 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
(FY2019, Toshiba Group, Cumulative numbers)
Topic Guidance and Support Suspension of transactions
Human rights/Safety 924 0
Environment 161 0
Examples of supplier guidance and support (FY2019)
Environmental Activities
  • Guidance on how to manage products containing chemical substances, etc. for suppliers
  • Guidance on risk assessment of chemical substances
  • Guidance on how to treat industrial waste material and liquid, etc.
Human Rights and Occupational Health & Safety (OHS)
  • Guidance on workplace safety and improvements to regular inspections
  • Supporting smelters to obtain conflict-free certification*
  • Training to enhance safety-related knowledge

* Conflict-free certification: A system by which a third-party organization certifies that an organization does not use conflict minerals (conflict free).

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 ISO 14001 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

Clean Partner Line Supplier Whistleblower System

Toshiba Group has set up a supplier whistleblower system called Clean Partner Line to receive reports from suppliers regarding persons in Toshiba Group who are involved in violations or possible violations of laws and regulations related to procurement and other transactions, Standards of Conduct for Toshiba Group and Toshiba Group Procurement Policy, business contracts or business ethics. Personal information of whistleblowers, is not disclosed to anyone other than Clean Partner Line staff without the whistleblower's consent. Also, the contents of reports are handled based on strict procedures, with care taken not to treat whistleblowers and their companies unfavorably for whistleblowing. We notify our suppliers of this system and request that they make use of it. Four reports were made in FY2019, and in each case, we conducted an investigation in collaboration with the related division and issued a directive to take corrective action or a warning for any inappropriate or suspicious activity discovered.

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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 human rights, labor conditions, OHS and the environment.

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

Toshiba Information Equipment (Philippines), Inc. (TIP) is resolute to its commitment of fostering a strong and responsible business relationship with its suppliers and service providers.
Driven by its corporate value of upholding integrity through compliance, TIP has initiated a half-day training program to introduce its Social Accountability Management System based on activities anchored on the Responsible Business Alliance (RBA) Code of Conduct. The activity was designed to cater suppliers, contractors and in-house service providers in the hope of expanding TIP’s scope of influence in communicating the essence of compliance while strengthening the knowledge and awareness of its external business partners on social and environmental responsibility. An explanation of RBA Code and its requirements was given to deepen their understanding.
The training was attended by Human Resource and/or Administration representatives from 92 companies and was facilitated by internal resource speakers from TIP's General Affairs and Compliance Department. Likewise, the training provided a platform for suppliers and service providers to share their experiences and best practices in adopting the RBA Code.
On-site compliance check was also conducted to pre-selected providers every semester to support them establish and gauge their level of compliance in TIP’s Social Accountability requirements.
With continuous education and awareness programs, together with a strong collaboration and communication, TIP hopes to intensify CSR management promotions and compliance within its supply chain.

Training for suppliers
Training for suppliers

Training for suppliers

Activity Example: Capacity Building with Suppliers

Training via the OHS-GUILD programTraining via the OHS-GUILD program

Toshiba Information Equipment (Philippines), Inc. (TIP) promotes awareness and partnership to its suppliers and services providers through OHS-GUILD*. This program aims to support suppliers to be compliant with labor standards including occupational safety and health standards. TIP shares best practices and policies during the session. Through this program, TIP supports its suppliers in promoting CSR management thereby strengthening partnerships with them. In November 2019, 92 people participants from different supplier companies joined the program. This also evaluates compliance of selected companies through site visit.

* Occupational Health and Safety Guild

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Ensuring Responsible Minerals Sourcing

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, investigates and reports 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.
In recent years, however, there has been heightened risk associated with minerals sourcing, affecting not only the Democratic Republic of Congo and adjoining countries but also other conflict-affected and high-risk areas, and extending to child labor and other general human rights violations, as well as corruption and other sources of risk. In September 2020, therefore, we revised our Conflict Mineral Policy and formulated the Responsible Minerals Sourcing Policy.

Toshiba Group Responsible Minerals Sourcing Policy

Toshiba Group has put in place this policy and the provisions below in order to avoid complicity in any conflict in any high-risk area, and in order to prohibit the use of tin, tantalum, tungsten, gold and cobalt whose production is the result of human rights violations, including forced labor and child labor, environmental pollution, corruption, or other abuses.

  • We undertake appropriate supply chain management, in accordance with the provisions of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. (PDF: 3.5MB)
  • We require suppliers to procure minerals from smelters that are compliant with the Responsible Minerals Assurance Process (RMAP) established by the Responsible Materials Initiative (RMI).
  • We do not refrain from using minerals produced in conflict-affected and high-risk areas, provided that such minerals are sourced in regions that are not involved in conflict, human rights violations, environmental pollution, corruption, or other abuses.
  • We ask our suppliers to adopt and observe the Toshiba Group Procurement Policy and Responsible Minerals Sourcing Policy, request that they provide us with information on smelters in their supply chain, and engage in dialogue and cooperation with them in order to contribute to reducing and eliminating risk in conflict-affected and high-risk areas.
  • When a potential risk in the supply chain is identified, we require our supplier to take corrective action, and depending on the outcome we may suspend the transaction or take other measures.

Toshiba Group continuously gathers information on minerals sourcing and works with suppliers to conduct business operations in line with this policy.

Toshiba Groups Promotion Structure for the Responsible Minerals Sourcing

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.

Toshiba Group's Promotion Structure for the Responsible Minerals Sourcing

Toshiba Group's Promotion Structure for the Responsible Minerals Sourcing

Responsible Minerals Sourcing Survey

We conduct surveys of Toshiba Group suppliers to monitor their use of tin, tantalum, tungsten, and gold (‘3TG’) and the smelters they deal with using the Conflict Minerals Reporting Template (CMRT).

We surveyed around 560 suppliers (cumulative number) that might use 3TG* in FY2019. We also took part in JEITA's Responsible Minerals Sourcing Inquiry Briefings (held 12 times in five cities throughout Japan; 930 participants) as a member of JEITA Survey Committee on Responsible Minerals Procurement in order to deepen understanding of responsible mineral procurement. We explained the questionnaire in the latest version of the survey and recent trends in mineral surveys, and provided individual consultation for participants.

JEITA Responsible Minerals Sourcing Inquiry Briefings 2019 (JEITA Website, Japanese)

Cooperation and Communication with External Organizations

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.

Key examples of external cooperation and dialogues regarding conflict minerals issues
Organizations and Projects related Toshiba Group Activities
RBA (Responsible Business Alliance) Joined in June 2011
RMI (Responsible Minerals Initiative) Participate in meetings and workshops as a member
JEITA
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.
As a member of this working group, issued a document continually to smelters in Japan and overseas which have not got Conflict-Free Certification in February 2017 demanding to comply with the certification program.

Japan Electronics and Information Technology Industries Association (JEITA)
Responsible Minerals Trade Working Group

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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.5.1 of our Green Procurement Guidelines in December 2019.
In Ver. 5.1 of our Green Procurement Guidelines, we revised the Toshiba Group’s Basic Policy for the Environment.
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 environmental performance, we request our suppliers to conduct a voluntary assessment of the level of greenness of their environmental activities (Toshiba standards) based on the environmental standard ISO 14001 by using a standard format and to report on assessment results. Assessment items include suppliers' environmental policies (corporate philosophy, environmental organizations, environmental improvement plans, environmental education, etc.), programs regarding environmental issues (air pollution, water contamination, waste, resource and energy consumption, foul odors, noise and vibration, recycling, biodiversity, etc.), and whether there are systems for managing the chemicals contained in products. In selecting suppliers, we assign priority based on the ranks of the suppliers and also encourage them to improve their level of greenness.

Green Procurement Guidelines (Japanese, English and Chinese)

The level of greenness of suppliers (FY2019)
(Priority suppliers 92.6% Rank S and Rank A)

The level of greenness of suppliers (FY2019) (Priority suppliers 92.6% Rank S and Rank A)

Green Purchase: Stationery and Other Office Supplies

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.

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