H.U. Group
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Sustainability

Supply Chain Management

Basic Approach

The H.U. Group carries out purchasing activities based on its Procurement Policy. This policy incorporates the requirement for fair, stable, and sustainable procurement transactions. In addition, in order to fulfill the social responsibility of the supply chain in purchasing activities, we have compiled and thoroughly disseminated the Basic Policy on Business Partner Selection, a policy describing the efforts we would like our business partners to take alongside the Group. In addition, these policies are available in three languages, Japanese, English and Chinese.

Procurement Policy

Established on July 5th 2019
Revised on July 16th 2021

The H.U. Group engages in fair, stable, and sustainable procurement in order to contribute to human health through the creation of new value. We value our relationship with suppliers, pursuing the following basic approach to procurement in establishing mutual trust.

  • We comply with the laws and social norms of every country in which we conduct business, striving to engage in procurement activities that consider respect for basic human rights, labor environments, occupational health and safety, child labor, and other related factors.
  • We provide opportunities for free and transparent procurement with suppliers around the world, working to improve our competitive capabilities through active due diligence, including procurement from new business partners.
  • We procure from excellent, highly trustworthy suppliers, selected based on a comprehensive list of factors including quality, price, delivery, technological capacity, Sustainability/EMS initiatives, business continuity, local procurement, and other factors.

Basic Policy on Business Partner Selection

Established on July 5th 2019
Revised on July 1st 2020

The H.U. Group selects excellent business partners based on our procurement policy and through the following assumed conditions.

  • Compliance with laws, basic human rights, and corporate ethics in every country in which the entity conducts business activities
  • Stable, healthy business infrastructure
  • Quality, pricing, delivery are at appropriate levels and based on rational economics
  • Compliance with non-disclosure agreements
  • Ongoing activities that consider environmental preservation
  • Capable of uninterrupted delivery activities, even in emergency situations

The H.U. Group recognizes the challenges and responsibilities involved in ensuring animal welfare, and is working to resolve societal issues while requiring its business partners to comply with local laws in each country and the Group's own regulations on issues including animal welfare.

Related Materiality

  • Sustainability procurement

Management

The Supply Chain Management Subcommittee, managed by the division head of Procurement at H.U. Group Holdings and with Procurement as its main driver, formulates and executes plans related to sustainable procurement. This subcommittee regularly monitors the progress of these activity plans and their results, and strives to act and take corrective action going forward.

Initiatives

Initiatives

When initiating a new transaction, we share our Procurement Policy and Basic Policy for Business Partner Selection. For existing business partners, we confirm the status of initiatives toward the realization of a sustainable society with business partners accounting for 80% of the order amount of each Group company approximately once every three years. Specifically, we utilize the United Nations Global Compact Self Assessment Tool (hereafter the UNGC SA), confirming details in a wide range of items: environmental conservation, occupational safety, and quality assurance, as well as corporate governance, fair trade, human rights (incl. child labor), information security, and more. We also use these results to evaluate our business partners, providing guidance for improvement based on the results of that evaluation.

Targets and Results

The H.U. Group conducts business partner surveys in a three-year cycle to ensure that each of the following group companies' business partners takes part in internal control systems evaluations once during the cycle: (1) domestic subsidiaries, (2) overseas subsidiaries and (3) other consolidated subsidiaries, etc.
Through the use of the survey and meetings for exchanging views (direct dialogue), the Group recognizes issues, shares problem-solving cases, and takes other steps as part of its ongoing commitment to improvement activities and relationship enhancement, and ultimately to raising the ratio of business partners who are awarded an A-Class rating (percentage mark of 60% or above).

<First survey / Results>

- FY2019:(1)
Of 89 business partners of domestic subsidiaries, 89 responded to the survey (100%). Of the respondents, the ratio of those who were awarded an A-Class rating was 84.3%.
- FY2020:(2)
Of 61 business partners of overseas subsidiaries, 33 responded to the survey (54.1%). Of the respondents, the ratio of those who were awarded an A-Class rating was 49.2%.
- FY2021:(3)
Of 26 business partners of other consolidated subsidiaries, etc. (excluding the first year and the second year), 23 responded to the survey (88.5%). Of the respondents, the ratio of those who were awarded an A-Class rating was 69.2%.

<Second survey / Progress>

- FY2022:(1)
Of 85 business partners of domestic subsidiaries, 85 responded to the survey (100%). Of the respondents, the ratio of those who were awarded an A-Class rating was 85.9%, representing an improvement of 1.6 percentage points compared to the first survey.

Sustainability Roadmap for Supply Chain Management

The first survey was conducted in FY2019 and it has been conducted in each fiscal year since then, targeting (1) domestic subsidiaries, (2) overseas subsidiaries and (3) other consolidated subsidiaries, etc. (“Others” in the table below).
In FY2022, the second survey targeting business partners of domestic subsidiaries commenced, and in FY2023 a new roadmap (two-year targets) was adopted.

＜Three-Year Targets and Results（FY2020～2022）＞

KPI [Reference results] Performance Performance
2022		 Three-Year Targets
and Results
Major Category Subcategory Item Unit 1st Survey・
(1) Domestic		 1st Survey・
(2) Overseas		 1st Survey・
(3) Others		 1st Survey・
(1) Domestic		 Cumulative total
2020-2022
2019 2020 2021 Target Acctual Target Acctual
Promotion of Sustainable procurement for Tier 1 Questionnaire collection rate Questionnaire collection rate % 100 54.1 88.5 100 100 100 82.4
UNGC SA analysis Class A rate
(Score of 60% of total points or more) 		% 84.3 49.2 69.2 90 85.9 90 70.3
Class B rate
(Score of 40-60％ of total points) 		% 12.3 4.9 11.5 8 11.8 Figures known 9.3
Class C rate
(Score of 40% of total points or less) 		% 3.4 0 7.7 2 2.4 Figures known 2.3
Share of non-responses % 0 45.9 11.5 0 0 Figures known 18.1

For the two years from FY2023 until FY2024, specific targets derived from the cumulative results of the second survey were set, and efforts are made to achieve the targets of each fiscal year.

＜Two-Year Targets（FY2023～2024）＞

KPI Performance Annual Target Two-Year Targets
(2nd Survey)
Major Category Subcategory Item Unit 2nd Survey・
(1) Domestic		 2nd Survey・
(2) Overseas		 2nd Survey・
(3) Others		 Cumulative total
2022-2024
2022 2023 2024 Target
Promotion of Sustainable procurement for Tier 1 Questionnaire collection rate Questionnaire collection rate % 100 100 100 100
UNGC SA analysis Class A rate
(Score of 60% of total points or more) 		% 85.9 70 90 75
Class B rate
(Score of 40-60％ of total points) 		% 11.8 20 8 20
Class C rate
(Score of 40% of total points or less) 		% 2.4 10 2 5
Share of non-responses % 0 0 0 0

Our Companies Subject to Survey

  • (1)Domestic subsidiaries（FY2019, FY2022）：
    H.U. Group Holdings, SRL, Fujirebio, NIHON STERY, Japan Clinical Laboratories, Care'x
  • (2)Overseas subsidiaries（FY2020, FY2023）：
    Fujirebio Diagnostics（U.S.）, Fujirebio Europe N.V.（Belgium）
  • (3)Other consolidated subsidiaries, etc.（FY2021, FY2024）：
    Consolidated subsidiaries, etc. excluding (1) and (2) above

Overview of assessment of 145 Group business partners (the first survey) *

* Involving business partners of Group companies both in Japan and overseas (subject to internal control assessment)
[By fiscal year: 89 companies in FY2019, 33 in FY2020, 23 in FY2021]

Risk assessment categorization: Responses are graded by survey item and grouped into three classes A-C with the highest scores (= lowest risk) at the top.

Business partner assessment distribution

Assessment of human rights items

We have analyzed human rights-related items, including labor aspects, from the assessments we conducted in the first survey for business partners of domestic and overseas group companies.

[Summary]

  • The collected results did not suggest any legal violations or serious concerns (accidents, lawsuits, etc.).
  • In particular, analyzing the "human rights" and "labor" items by Japanese and overseas responses has shown that both have high risk with regard to "4. Respect for the lives of indigenous peoples, their local communities."
  • In addition, we are working to improve initiatives and reduce risk with business partners that have high-risk items, while also investigating individual circumstances and exchanging information about best practices to make improvements.
  • We intend to continue to conduct assessments of business partners as well as work to improve response rates and scores through communication suitable for every level.

Assessment results about human rights and labor[PDF:123KB]

Result in FY 2022: [Oversea companies’ business partners] results of the assessment of the 33[PDF:113KB]