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.
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
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
In FY 2019, We accessed 89 business partners and collected the 100% of UNGC / SA results from them, which account for 80% of the annual procurement and purchase amount of each our group company (* 1) that are subject to internal control evaluation in Japan. In fiscal 2020, group companies (* 2) subject to overseas internal control evaluations attempted to evaluate 61 target companies calculated from the same purchase price ratio, and UNGC / SA was selected from 33 companies, which corresponded to approximately 54.1%. We collected it and found that about half of them fall into class A.
Then in fiscal 2021, we expanded the scope of evaluations to 26 target companies among other consolidated subsidiaries, etc. (* 2), and as a result of collecting UNGC / SA results from 23 of them, which is around 88.5%, we found that 69.2% of them fall into class A.
Based on the results, we will hold dialogues and engage in continuous improvement activities in order to improve the ratio of Class A business partners.
Sustainability Roadmap for Supply Chain Management (Three-year Targets)
| KPI | Performance | Performance 2021 |
Cumulative total 2019-2021 |
Target | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Major Category | Subcategory | Item | Unit | 2019 | 2020 | Target | Acctual | Target | Acctual | 2022 |
| Promotion of Sustainable procurement for Tier 1 | Questionnaire collection rate | Questionnaire collection rate | % | 100 | 54.1 | 100 | 88.5 | 100 | 82.4 | 100 |
| UNGC / SA analysis | Class A rate (Score of 60% of total points or more) |
% | 84.3 | 49.2 | Figures known |
69.2 | Figures known |
69.9 | 90 | |
| Class B rate (Score of 40-60％ of total points) |
% | 12.3 | 4.9 | Figures known |
11.5 | Figures known |
9.7 | 8 | ||
| Class C rate (Score of 40% of total points or less) |
% | 3.4 | 0 | Figures known |
7.7 | Figures known |
2.8 | 2 | ||
| Share of non-responses | % | 0 | 45.9 | Figures known |
11.5 | Figures known |
17.6 | 0 | ||
Our Companies Subject to Survey
- FY2019:(1st Survey) H.U. Group Holdings, SRL, Fujirebio, NIHON STERY, Japan Clinical Laboratories, Care'x
- FY2020:(1st Survey) Fujirebio Diagnostics (US), Fujirebio Europe (Belgium)
FY2021:(1st Survey) Non-domestic Group consolidated subsidiaries as of FY2019
FY2022:(2nd Survey) H.U. Group Holdings, SRL, Fujirebio, NIHON STERY, Japan Clinical Laboratories, Care'x
Overview of assessment of 145 Group business partners (*)
* 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.
Assessment of human rights items
We have analyzed human rights-related items, including labor aspects, from the assessments that we conducted from FY2019 to FY2021 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]](/assets/img/en/sustainable/procurement/prc_assessment2023_e.jpg)
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Sustainability Subcommittee