Sustainability

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CSR Procurement (Initiatives for Supply Chain)

We at the Kyowa Hakko Kirin Group are working to conduct open and fair CSR procurement to ensure a stable supply of high-quality products. As part of its efforts, we stipulate the Kyowa Hakko Kirin Group Procurement Policy, which announces its determination to promote CSR procurement in collaboration with suppliers.

We revised the Kyowa Hakko Kirin CSR Procurement Guidebook* in December 2017 to respond to the growing importance of CSR procurement and established the Supplier Code of Conduct, which covers areas in which cooperation by suppliers is required, including respect for human rights, compliance with rules, environmental conservation, and information management.

Furthermore, internal training is provided in order to ensure that all employees have a shared awareness of the significance of practicing CSR procurement throughout the supply chain.

With the understanding and cooperation of its suppliers, we will continue promoting CSR procurement across the entire supply chain.

Kyowa Hakko Kirin Group Procurement Policy

To provide customers with safe and reliable products and services with clear value propositions, and thereby to fulfill the Kyowa Hakko Kirin Group’s management philosophy whereby “The Kyowa Hakko Kirin Group companies strive to contribute to the health and well-being of people around the world by creating new value through the pursuit of advances in life sciences and technologies”, the Kyowa Hakko Kirin Group (hereafter referred to as ”the KHK Group”) is committed to fair and open procurement with the cooperation of our suppliers.

  1. Steady focus on quality
    1. In procurement practices, we place a high priority on pursuing safety and quality in accordance with the “KHK Group Basic Policy on Quality,” while also taking costs into account.
    2. We welcome new ideas and technical solutions for increasing customer value from suppliers.
  2. Fair and open business dealings
    1. We select suppliers based on their performance in quality (Q), cost (C), delivery (D), reliable supply, CSR efforts, technological expertise and ability to propose innovative ideas, etc.
    2. We use a competitive bidding and selection process for procurement to ensure fairness to all suppliers.
  3. Ensuring regulatory and ethical compliance
    1. We observe social norms as well as the letter and spirit of laws and regulations, and conduct business in a sensible and socially responsible manner.
    2. Employees engaged in procurement practices shall not have personal conflicts of interest with any supplier. They shall not receive from any supplier rewards or gifts which deviate from social norms. They shall not force any supplier to make donations to the Group nor to buy products and services from the Group. They shall not impose a reciprocal business arrangement on any supplier.
  4. Environmental stewardship
    1. We observe environmental laws, regulations, and ordinances, voluntary industry standards for the environment, and our own voluntary standards, to help society maintain a harmonious coexistence with nature.
    2. We conduct environmentally sensible, nonpolluting procurement practices in accordance with the KHK Group’s “Basic Policy on Environmental, Safety and Productive Safety”.
  5. Coevolving relationships of mutual trust with suppliers
    1. We strive to establish long-term, coevolving relationships of trust with suppliers. We work with suppliers to manage and avoid risks so as to minimize their impacts on society and the KHK Group’s business.
    2. We take the utmost care when managing personal information and confidential business information provided to us by suppliers, and do not disclose them to internal or external parties without the explicit approval of the original suppliers of such information.
  6. Promotion of CSR procurement
    We actively promote CSR procurement and commit to sustainable social development with suppliers.
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Promoting CSR procurement

Since 2012, we have been conducting questionnaire surveys to obtain updates on CSR activities conducted by our suppliers. In 2018, 440 suppliers responded to the questionnaire, which was composed of 42 wide-ranging questions on topics covered by the Supplier Code of Conduct, including respect for human rights, legal compliance, and environmental conservation, as well as business continuity planning (BCP) measures and quality assurance.
The result of the 2018 survey indicated a rising trend among suppliers to engage in “initiatives for upstream suppliers,” “green procurement,” and “BCP,” displaying a heightened awareness of the importance of collaborating across the supplier chain to promote CSR procurement. Meanwhile, our suppliers’ engagement in initiatives for biodiversity remained roughly the same as in the past. We provide the respondents with the survey findings, visit each supplier to keep track of their CSR activities, and work hard to encourage them to make improvements in their activities.

In 2018, as a measure to strengthen our partnerships with our suppliers, we organized the Kyowa Hakko Kirin Supply Chain Exchange Session, where we shared information with 28 suppliers on supply-chain-wide issues and solutions on a theme-by-theme basis. At the session, we also introduced the Company’s key management policies on quality assurance, prohibition of bribery, respect for human rights, environmental conservation, and legal compliance throughout the supply chain. Furthermore, we offered information on revisions of laws and regulations within and outside Japan in response to changes in the social environment, as well as preliminary results of the 2018 CSR survey of suppliers, to help our suppliers better understand our CSR procurement activities.

Starting 2018, our transaction agreements with our suppliers include a provision on “compliance with the Supplier Code of Conduct.” We ask for our suppliers’ kind understanding and cooperation in this matter. We will continue to implement a variety of initiatives to strengthen collaboration across the supply chain and proactively promote CSR procurement among suppliers within and outside Japan.



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