Sustainable Procurement Activities

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Yokogawa has focused on developing a supply chain that considers environmental protection and human rights. We will actively identify risks that impede sustainable procurement, taking the path to improvement with our business partners, and strengthening activities aimed at achieving our sustainabiliy goals "Three goals".

 

Summary of Activities

We are identifying risks that impede sustainable procurement with our business partners, focusing on understanding the actual conditions of the following 4 areas(defined in Yokogawa Group Sustainable Procurement Guidelines for Suppliers) : "Labor and Human rights" "Health and safety" "Environment" and "Ethics". In case a risk is realized, we work with our suppliers to take measures against it. We also develop educational programs on sustainable procurement both inside and outside the company. We set KPIs to manage and measure progress of sustainable procurement activities.

 

2019 Activity Results

As a preparatory year for sustainable procurement activities, in 2019 following evaluations and surveys were conducted to define KPIs for these activities.
1) Evaluations of human rights risks of the entire group.
2) Surveys on attitude of major supplier on sustainable procurement.

Results of evaluations and Surveys

1) Human rights risk assessment

Desktop research and interviews were conducted to evaluate the human rights risks in terms of both severity and importance to business with external expert. Based on the results we have prioritized our focus activities.

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As a result, it was found that promoting cooperation with suppliers regarding sustainable procurement is one of the highest priority activities.
In particular, given the characteristics of the Group's business, we have learned that it is necessary to understand the human rights and safety risks of workers in the supply chain.

 

2) Surveys on attitude of suppliers

We conducted an attitude survey of the major suppliers (183 companies) by region in the group. Our SAQ targets are 183 companies which were selected from the 260 biggest suppliers among approximately 10,000 companies based on our purchasing system records.

Surveys on attitude of suppliers

 

We conducted an attitude survey by questionnaires on policies and implementation status regarding the items listed in the Group's Sustainable Procurement Guidelines such as human rights, labor, health and safety, environment, ethics, conflict minerals, helpline and so on.

result

By scoring and comparing the supplier responses such as existence / non-existence of policies and implementation status, we found differences by industry and region. Based on the results, we formulated an action plan for sustainable procurement activities. From FY 2020, we will start self-assessment questionnaire (SAQ) for our business partners.

Education

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We provide e-learnings of sustainable procurement for employees and we are preparing a system that enables employees to take courses on demand. In 2019, 85.7% of employees who are in charge of domestic procurement took this course. We also provide oral sessions to promote sustainable procurement.

 

Activity Action Plans

The Yokogawa Group plans sustainable procurement activities and sets KPIs with reference to ISO20400 (Sustainable Procurement-Guidance). In 2020 we will cooperate with external experts to establish a cycle to identify high-risk workplaces and to provide written feedbacks and on-site monitoring by evaluating the SAQ response from our suppliers.

Activity Action Plans

 

1) SAQ Execution

With expert advice we have chosen approximately 600 companies as SAQ targets in high-risk industries among the top 1070 companies with the highest purchase volume from approximately 10,000 companies. Our target is to conduct SAQs approximately 200 suppliers every year and provide feedbacks to them.

     

KPI

Cumulative number of Companies

Target year

Number of work-places of suppliers executing SAQ

200 Companies

FY 2020

400 Companies

FY 2021

600 Companies

FY 2022

 

2)Supplier agreement to our sustainable procurement policy

To improve our activities with suppliers, we will ask our business partners to agree to our sustainable procurement policy in our group’s supply chain.

     

KPI

Cumulative number of Companies

Target year

Number of accepting agreements of Sustainable Procurement from suppliers

70 Companies

FY 2020

140 Companies

FY 2021

210 Companies

FY 2022

 

3) Supplier seminars

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Every other year we have explained our business plans, and procurement policies to about 70 major suppliers. In this seminars, we will explain sustainable procurement activities on the supply chain.

 

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