Companies are required to carry out social and environmentally friendly business activities throughout the supply chain. We also need to mitigate sustainability risks in the supply chain to ensure business continuity. We will strengthen cooperation with raw material manufacturing suppliers, production contractors, trading companies, wholesalers, and other business partners, and promote "responsible procurement" initiatives aimed at reducing risks and increasing shared value in society and environment. Our sustainable procurement is carried out in a four-step program: (1) Holding business partner briefing sessions on sustainable procurement, (2) Request for submission of consent form regarding "Code of Conduct for Business Partners", which is the Supplier Code of Conduct, (3) Sustainability assessment of business partners using the EcoVadis platform, (4) Improving the sustainability of business partners through interview engagement. In fiscal 2020, we implemented sustainable procurement for domestic manufacturing suppliers at domestic factories.
The results of sustainable procurement in fiscal 2020 are as follows.
- Joining PSCI (Pharmaceutical Supply Chain Initiative): It makes sense for both pharmaceutical companies and suppliers to bring the pharmaceutical industry together to tackle supply chain sustainability issues. In January 2021, we joined PSCI, a non-profit organization that aims to promote sustainable sourcing of supply chains in the pharmaceutical industry.
- Revision of "Code of Conduct for Business Partners": The Code of Conduct for Business Partners summarizes the minimum requirements for our business partners. The Code of Conduct which was revised in 2020 sets the standards for legal compliance, ethics, human rights and labor, health and safety, environment, and management system, and complies with the PSCI Principles, the Pharmaceutical Industry Principles for Responsible Supply Chain Management issued by the PSCI.
- Holding a business partner briefing session: We held a business partner briefing session for 44 major primary and secondary manufacturing suppliers of direct materials, at which we explained the importance of improving sustainability, procurement policies, the Code of Conduct for Business Partners, and EcoVadis evaluation platform, and asked for their understanding.
- Consent to comply with the Code of Conduct: In fiscal 2020, we received consent forms from a total of 92 business partners, including 43 business partners out of 44 companies that participated in the briefing session and 48 business partners of major Tier 1 wholesalers and trading companies.
- EcoVadis sustainability assessment and feedback on the results: There was no company considered as at high risk among the 34 suppliers participated in the briefing session. We interviewed business partners who have room for improvement judging from the assessment scores, and shared common understanding of points to be improved by the next evaluation.
In fiscal 2021, we will expand the sustainability evaluation of our business partners in Japan and overseas to promote responsible procurement in the supply chain. We plan to expand the scope of the Code of Conduct Agreement to 100 major domestic and overseas business partners, and aim to have 60 companies participate in the EcoVadis sustainability assessment of major manufacturing suppliers.