Promote Sustainable Procurement throughout the Supply Chain
Responsible Procurement Surveys
We have conducted a survey targeting our key suppliers [1] using a Responsible Procurement Check Sheet since fiscal 2014. The survey covers the seven themes, namely human rights and labor, safety and health, environment, fair and ethical trade, quality and safety, information security and contribution to society, as defined in the KDDI Group Sustainable and Responsible Procurement Guidelines based on the Responsible Business Alliance (RBA) code of conduct and Responsible Business Conduct Guidelines published by the Japan Electronics and Information Technology Industries Association (JEITA). In addition, it also covers other items that KDDI deems pertinent, focusing on human rights and labor, health and safety, and the environment. Through this survey, we make sure of sharing the KDDI Sustainable and Responsible Procurement Policy and other necessary information with suppliers. In FY2022, the survey was conducted with the top 90% of primary suppliers of KDDI Group in terms of total order value, and a high response rate of 97% was obtained, which is useful for understanding the supply chain situation and analyzing risks. Furthermore, starting from FY24.3, we will be introducing the third-party evaluation platform EcoVadis [2].
[1]Key suppliers: Suppliers with high transaction volume, suppliers of critical parts, and non-substitutable suppliers and have agreed to policies and guidelines, including sustainability requirements (environment, social, governance, etc.).
[2]A sustainability assessment service consisting of four parts: "environment," "labor practices and human rights," "ethics," and "sustainable materials procurement."
Item
FY2022 KPI
FY2022
(reference) FY2021
Questionnaire response rate
over 90%
97%
98%
Number of hearing companies
over 30
32
5
Completion rate of improvement proposals
100%
100%
-
Summary of Implementation
FY2022
Companies to request
Top 90% of KDDI Group's purchases [3]
Number of Companies Requested
150 [4]
[3]The number of tier-1 suppliers of the KDDI Group is approximately 2,500 companies (excluding our affiliated companies)
[4]Including 16 overseas subsidiaries
Industry
Business
Number of companies
Ratio
Service Industry
Temporary staffing, consulting, advertising, etc.
69
46%
Information and Communication
Software, SI, etc.
34
22%
Manufacturing
Terminals, base stations, electronic equipment, etc.
25
17%
Construction
Base station construction, telecommunications construction, etc.
22
15%
Survey Items
From FY2022, the Sustainable Procurement Survey has been expanded to include high-risk items such as human rights, environment, and information security to strengthen risk assessment in the supply chain. The questionnaire is divided into a section on human rights, including conflict minerals and the foreign technical internship system, an environmental section including CO2 emissions based on Scope 1, 2, and 3, and a Code of Conduct section related to CSR (Corporate Social Responsibility). For those suppliers that are determined to be high-risk, we take corrective actions such as detailed confirmation through hearings and support through improvement proposals.
Theme
Number of questions
Sample questions
Questions for high-risk management (human rights and environment)
20
Use of conflict minerals, appropriate information and employment of foreign workers, reduction of energy consumption, etc.
Compliance with Laws and Regulations and Respect for International Norms
4
Compliance with laws and regulations, respect for international norms (clear statement of policy, clarification of responsible persons, etc.)
Human rights and labor
12
Respect for human rights/securing workers' rights, consideration for working hours, appropriate wages and benefits, etc.
Health and Safety
5
Health and safety (compliance with laws, regulations, guidelines, etc.)
Environment
13
Environmental permitting and reporting, reduction of environmental impact, air emissions, water management, effective use of resources and waste management, etc.
Fair Trade/Ethics
15
Anti-corruption, proper disclosure, fair business practices, protection of informants, responsible mineral sourcing, etc.
Quality and Safety
2
Existence or non-existence of violations, establishment or non-existence of a management system, etc.
Information Security
8
Compliance with laws and regulations, protection of personal information, leakage of confidential information, response to security incidents, etc.
Business Continuity Planning
1
Formulation and preparation, etc.
Social Contribution
1
Existence or non-existence of contribution activities
Establishment of management system
7
Establishment, management, and supervision of management systems, appropriate import/export control, development of complaint handling mechanisms, etc.
Total
88
Report on Survey Results
The average score of companies responding to the 12 themes of the survey was 83%. The highest scoring items were "Questions for high-risk management (human rights)," "Compliance with laws and regulations and respect for international norms," and "Information security," while the lowest scoring items were "Questions for high-risk management (environment)," "Social contribution," and "Establishment of management system.
Risk Analysis and Risk Improvement Proposals
The following table shows the results of the evaluation of suppliers' initiatives based on the "scoring rate" into which we grouped the suppliers' responses to the survey. For those suppliers whose efforts are judged to be insufficient and whose risk is considered high, we will provide feedback on the survey results and exchange opinions with them, and if we are able to identify issues, we will request improvements. In FY2022, we conducted on-site investigations of concerns through third-party audits and provided improvement recommendations. Furthermore, if improvements and corrections are not made within a certain period, we will consider suspending transactions.
Rank
Total score
Ratio
Definition
Group A
over 80%
65%
Excellent efforts are being made.
Group B
60% to less than 80%
34%
General efforts are being made.
Group C
under 60%
1%
Insufficient efforts
Theme
Opinion exchange items
Number of companies requiring improvement
Improvement Proposal Completion Rate
Human Rights
Management Regulations to Prevent Discrimination and Harassment
2
100%
Grasping the status of management and actual conditions of products containing conflict minerals
5
100%
Grasping the actual status of transactions with risk areas
5
100%
Initiatives for grievance mechanisms involving workers and suppliers
5
100%
Environment
Management of greenhouse gas emissions and CO2 emissions
10
100%
Selection of suppliers in consideration of their environmental initiatives (e.g., CO2 emissions)
6
100%
Exchange of Opinions with Suppliers and Collaboration among Correspondents
We make sure that we visit a supplier's worksite or have online meetings, exchange views, and share information about sustainable procurement initiatives in a bid to build a better partnership with the supplier. In FY2022, we exchanged opinions with 32 suppliers on themes such as human rights and the environment, and proposed improvements as necessary. In addition, we regularly exchange opinions on sustainable procurement with Nippon Telegraph and Telephone Corporation and SoftBank Corp. to promote collaboration among telecommunications carriers. As one of the results of our initiatives, we will standardize sustainability surveys and incorporate them into the supplier engagement activities of all three companies through a common Sustainability Self-Assessment Questionnaire (SAQ) starting in fiscal 2023.
Training and Awareness Activities
Target
Initiative details
Employees responsible for procurement (KDDI Group)
Training program for newly appointed personnel
Recommendation to pass the exam for Certified Procurement Professionals
Implemented a training session on sustainable procurement for purchasing staff
Briefing sessions on sustainable procurement
Suppliers
Explanation of sustainable procurement initiatives and request for responses to sustainable procurement survey
Implemented procurement activities based on the Sustainable Procurement Handbook (Sustainability assessment for selection of suppliers for projects above a certain procurement amount from FY2023)
Corporate Information 
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