Policy on Sustainable Procurement
Establishment of the “Kirin Group Sustainable Procurement Policy”
To fulfill its social responsibility, the Kirin Group established the “Kirin Group Sustainable Procurement Policy” in September 2017, and revised this policy in April 2021. The Group will implement initiatives to realize this policy going forward.
Kirin Group Sustainable Procurement Policy
The Kirin Group upholds the essential values in the areas of human rights, labor, the environment, and anti-corruption defined by the United Nations Global Compact, of which we are a signatory. We engage in procurement activities that follow five themes for initiatives in compliance with this principle and with Group policies, to improve sustainability from global perspectives, enhance corporate value, and contribute to society.
- Steady focus on quality
We place a high priority on pursuing quality and safety in our procurement practices, in accordance with the Kirin Group’s Quality Policy.
- Ensuring regulatory and ethical compliance
We observe social norms and the letter and spirit of laws and regulations and conduct business in a sensible and socially responsible manner, in accordance with the Kirin Group Compliance Policy.
- Respecting human rights
We embody the ideas laid out in the Kirin Group Human Rights Policy and address human rights issues together with our suppliers.
- Environmental stewardship
We strive to protect the global environment and prevent pollution and conduct environmentally sensible procurement practices in accordance with the Kirin Group’s Environmental Policy.
- Coevolving relationships of mutual trust with suppliers
We establish long-term relationships of trust with suppliers through fair and open procurement practices and work with suppliers to solve social issues to achieve co-existence and co-prosperity.
Establishment of the “Kirin Group Sustainable Supplier Code”
In the revision process, we held multiple dialogues with human rights experts, NGOs, and ESG specialists on the theme of "sustainable procurement" and reflected their opinions in the Supplier Code.
The Kirin Group is working with its suppliers, who are also business partners, in order to meet the demands and expectations of society, while continuing to create a variety of value through its business. To enable this process, in April 2021, the Kirin Group established the “Kirin Group Sustainable Supplier Code”—a collection of conditions that suppliers must comply with, based on the “Kirin Group Sustainable Procurement Policy.” The Code respects international standards such as the OECD Guidelines of Multinational Enterprises, the UN Guiding Principles on Business and Human Rights, the Core Conventions of the International Labor Organization [ILO], the Ten Principles of UN Global Compact, and the Women's Empowerment Principles [WEPs], and strives to ensure that all upstream channels in the supply chain, as well as the Kirin Group’s own business operations, conform to these standards on an ongoing basis.
All suppliers are asked to submit a letter of acceptance to agree to and cooperate with this Code. The consent form clearly states that in the event of a serious violation of the Code or failure to cooperate in continuous improvement, business with the Kirin Group will be terminated.
In accordance with the Kirin Group's Quality Policy, we give priority to quality and safety in our procurement activities.
In accordance with the Kirin Group's Compliance Policy, we comply with social norms, relevant laws and regulations and its sprits and carry out sensible activities to be trusted by society.
- Respect for human rights
In accordance with the Kirin Group's Human Rights Policy, we will promote this concept and implement human rights initiatives with our suppliers.
- Environmental conservation
In accordance with the Kirin Group Environmental Policy, we will strive to protect the environment, prevent pollution, and conduct procurement activities in consideration of the global environment.
- Business integrity for coevolving relationships with our suppliers
We will build long-term relationships of trust with our suppliers through open and fair procurement activities, and strive for coexistence and co-prosperity with our suppliers and society.
Sustainable Procurement Management System
The Kirin Group recognizes that addressing various sustainable procurement issues, including human rights and environment in the supply chain, is one of its key management issues, and important matters and targets are brought to the Board of Directors, the Group CSV Committee, the Group Business and Human Rights Meeting, and other related meetings for discussion and resolution. Under this management system, we follow the “Kirin Group Sustainable Procurement Policy” and the “Kirin Group Sustainable Supplier Code”, set targets in our management plan, and strengthen our governance by regularly managing progress. Procurement risks are centrally managed by risk management, and in the event that a procurement risk should materialize, the relevant departments will immediately collaborate under the direction of the director in charge of risk to share information, implement countermeasures, prevent recurrence, and horizontally spread the risk information to other departments for confirmation and response.
With regard to supplier management, the Procurement Department of Kirin Holdings has established a function to be in charge of procurement strategies for the entire Group, and is working in a system that coordinates with Group companies. The policies and strategies formulated by Kirin Holdings are communicated to the Group through the Group Procurement Meeting, and are then implemented as specific measures in the procurement activities of Group companies.
Kirin Group also places great importance on mutual communication with its suppliers. Before starting transactions with suppliers, we explain the Kirin Group Sustainable Supplier Code to them and ask them to comply with the Code using a checklist and a consent form. After the start of transactions, we periodically check the status of compliance with the Code with suppliers through questionnaires and supplier evaluations. The results of the questionnaire survey and supplier evaluation are fed back to the suppliers, and if their risk management efforts are insufficient, we conduct additional surveys and request corrective actions or provide support for improvement as necessary. In addition, we hold supplier briefings and training sessions to deepen suppliers' understanding of the Kirin Group's procurement activities, the Kirin Group Sustainable Procurement Policy, and the Kirin Group Sustainable Supplier Code. We also conduct a Supplier Satisfaction Survey to confirm and verify whether our procurement activities are in line with the Kirin Group Sustainable Procurement Policy. We are working to strengthen our relationships with suppliers by promptly addressing items that we believe require particular improvement. In addition, we have established a reporting hotline for suppliers (hotline) where suppliers can report concerns about their business transactions. Through these efforts, we will continue to work with suppliers and promote sustainable procurement by implementing the PDCA cycle.