Aiming to Promote Sustainability Throughout the Supply Chain Based on Sustainable Procurement Policies

Abstract

In recent years, as the amount of ESG investment has grown both in Japan and overseas, the implementation of procurement of raw materials with environmental and social considerations, such as the impact on the ecosystems of production sites, labor rights, and the working environment, has become an important factor in corporate procurement activities, and has become one of the factors for evaluating a company.

Against this backdrop, companies, especially those with global operations, are increasingly formulating “sustainable procurement policies （e.g., CSR procurement policies）” that stipulate their initiatives in areas such as environmental conservation, human rights, and labor, and requiring their suppliers to comply with their initiatives in line with these policies. This movement aims to balance the economic aspect of sustainable development of the company’s business with environmental conservation by ensuring the sustainability of the earth’s natural capital, and surveys are being conducted to ascertain the current status of supplier initiatives. This trend toward sustainable procurement is not something that only global companies and major corporations are addressing; it is a story that concerns all companies, including major corporations and small and medium-sized enterprises operating in Japan.

In addition to formulating individual policies for environmental and social aspects, companies are required to formulate medium- and long-term goals and plans for their overall sustainability efforts, collect relevant data for information disclosure, and manage progress based on KPIs in order to demonstrate that they are making organizational efforts in the questionnaire survey and other surveys. To achieve these requirements, it is not enough for departments that promote the environment and sustainability, but also for understanding from management, and coordination and consensus building with related departments. In terms of sustainability management, business environment of companies is rapidly changing with the application of new frameworks and regulations on sustainability. It is therefore necessary for companies to share and understand the essence and importance of issues described above throughout the company and throughout the supply chain.

This paper introduces the contents and efforts related to the promotion of corporate sustainability activities, including survey results.