CSR – Supply Chain Management
The Mitsubishi Electric Group ensures fair and impartial selection and evaluation of business partners in Japan and overseas by providing an explanation of the Group’s Purchasing Policy and CSR Procurement Policy, and requesting business partners’ understanding of these policies. By ensuring proper evaluation of suppliers based on selection and evaluation criteria established by the Group, risks are also mitigated along the supply chain.
As a basic policy, the Group preferentially procures materials from suppliers who rank high in a comprehensive evaluation.
The Supply Chain of the Mitsubishi Electric Group
Accompanying the further advancement of globalization, the Mitsubishi Electric Group’s supply chain is also expanding to the various countries where the Group operates. However, in newly emerging countries in particular, we are aware that there are issues from various perspectives, such as labor laws and environmental problems. Accordingly, we are taking action based on the realization that reducing risks in these regions is especially important.
Our Purchasing Philosophy
Mitsubishi Electric purchases a wide variety of materials and components from both Japanese and overseas markets. We recognize our corporate responsibility and are eager to provide business opportunities for the communities in which we operate.
- 1. Easy Access and Equal Opportunity
- To guarantee our customers the highest-quality products, we are constantly searching for new suppliers. We encourage business partners from all over the world, regardless of size, to contact us about submitting a quotation. The decision to embark on a new business relationship is made after careful consideration of three major factors: product price, product quality, and delivery performance. To ensure continued high quality and efficiency, we periodically review our relationships with our partners.
- 2. Mutual Prosperity
- We believe in long-term relationships built upon understanding and trust. This will allow the participation of our business partners during the product development stage, paving the way for mutual prosperity.
- 3. Ecological Soundness
- We are interested in the materials and manufacturing processes used by our suppliers. Because we value the environment, we buy only ecologically sound products. Our mission is to satisfy the needs of people around the globe. To meet their growing expectations, we must widen and strengthen our affiliations with companies all over the world. We are seeking cooperation, not just business, and are looking for potential partners who are willing to join us in our drive toward global prosperity.
CSR Procurement Policy
We carry out distribution activities in line with our "CSR Procurement Policy," which was established in fiscal 2008.
- Compliance with domestic and foreign laws/regulations and social standards
- Ensuring compliance with laws and regulation
- Respecting human rights and prohibiting discrimination, child labor, and forced labor
- Creating proper work environments and giving consideration to safety and health
- Assurance of quality and safety of products and services
- Environmental considerations
- Procuring materials with less negative impact on the environment
- Ensuring strict management of harmful chemical substances based on an environmental management system
- Promotion of fair trade based on corporate ethics
- Practicing honest trade on fair and equal footing, based on laws/regulations and agreements
- Ensuring strict management and safeguarding of information by establishing an information security system
- Thorough elimination of fraudulence, bribery, and other such conduct that violates corporate ethics
Mitsubishi Electric Group Initiatives for Responsible Minerals Procurement
The Mitsubishi Electric Group views such issues as environmental destruction and the abuse of human rights by armed groups in the Democratic Republic of Congo and its neighboring countries as issues of the utmost concern. As transactions of conflict minerals* are said to fund these armed groups, we are implementing measures to ensure the transparency of our supply chain so that we do not encourage or become complicit in such issues in any way, and to promote responsible mineral procurement.
- Conflict minerals refers to gold, tin, tantalum, tungsten, and other minerals that have been determined by the U.S. State Department to be a source of support for armed groups when mined in the countries referred to above.
Requests to Suppliers
Suppliers to the Mitsubishi Electric Group are requested to gain an understanding of the Group’s Purchasing Policy and CSR Procurement Policy, and to actively comply with the following matters in consideration of various relevant guidelines (including the guidelines of the Japan Electronics and Information Technology Industries Association (JEITA)).
- 1. Compliance with laws, regulations and social norms
- Please comply with laws and regulations in countries and regions where you engage in business, as well as with international agreements, transaction ethics, and social norms.
(Elimination of corrupt practices such as bribery, embezzlement, and illegal political contributions; compliance with relevant laws and regulations, including the Antimonopoly Act, Subcontractor Act, and Foreign Exchange Act; prohibition of the illegal acquisition and utilization of intellectual property; proper information disclosure; execution of faithful transactions based on contracts, etc.)
- 2. Respect for human rights
- Please respect basic human rights in countries and regions where you engage in business.
(Prohibition of inhumane treatment like forced labor, child labor, abusive treatment, human trafficking, and harassment; prohibition of all forms of discrimination; proper payment of wages; proper management of working hours; respect for the right to organize, etc.)
- 3. Consideration for health and safety
- Please give due consideration to health and safety in all countries and regions where you engage in business.
(Safety measures for machines and devices; evaluation and measures against the occurrence of accident and health hazard risks; preventive measures against large-scale disasters and accidents, etc.)
- 4. Environmental considerations
- Please take measures to provide products and services that place minimum burden on the environment.
(Acquisition, maintenance and management of environmental management system certification; compliance with environmental laws and regulations; proper management of chemical substances in products, etc.)
- 5. Product and service quality and safety
- Please take measures to ensure the quality and safety of products and services you provide.
(Design, evaluation and testing for ensuring safety; compliance with laws and regulations related to safety; construction, maintenance and management of quality management systems, etc.)
- 6. Security measures for information systems
- Please take appropriate measures to protect against computer network threats.
(Construction of prevention measures against computer viruses and cyberattacks; prevention of information leakage through proper management of confidential information and personal information, etc.)
Risk Mitigation based on Fair Selection and Evaluation of Business Partners
Evaluation status of suppliers’ initiatives to address CSR/environmental issues
The Mitsubishi Electric Group evaluates business partners prior to commencing new transactions and at regular intervals in the case of ongoing transactions, in terms of quality, price, delivery time, and customer service, as well as their initiatives to address environmental regulations and CSR initiatives.
Since 2006, the Mitsubishi Electric Group evaluates the status of suppliers’ initiatives to address environmental issues based on the Green Accreditation System. Based on the Green Procurement Standards Guide and using an original survey form, the Green Accreditation System conducts a survey of each supplier’s acquisition status for environmental management system certification, status of compliance with laws and regulations related to the environment, and management status of chemical substances contained in components or materials they deliver to our company, and certifies suppliers who meet our standards.
By properly evaluating the status of our business partners’ environmental initiatives under this system and providing advice for any corrections that should be made by partners who do not meet the certification standard, we ultimately minimize environmental risks.
From 2009, the status of CSR initiatives has been included among the survey items, and a survey is also made of issues such as human rights, labor practices, safety and health, legal compliance, and product safety. In reference to our suppliers’ replies regarding these issues, we provide feedback about the results of our evaluation. We also hold individual meetings with suppliers who have scored low in any one of the survey items, to request a further strengthening of initiatives as required to reduce risks related to CSR.
The Mitsubishi Electric Group’s Green Procurement Standards Guide and other relevant documents are available from the following page on our website, and are reviewed as necessary in response to changes in laws, regulations, and social norms.
Numbers of suppliers evaluated (status of their initiatives to address CSR and environmental issues)
|2016||Approx. 1,000 companies|
- All new suppliers are evaluated (FY2017).
- The numbers of suppliers are cumulative totals.
Number of suppliers given guidance in fiscal 2017 and the content of the guidance
|Item||No. of companies
|Content of guidance|
|Environment||21||Improvement of initiatives regarding the environmental management system, further strengthening of initiatives for the restriction of chemical substances in products|
|Human rights, labor practices, safety and health||45||Improvement of the management of working hours, correction of dangerous areas, strengthening of safety measures for machines and devices, strengthening of safety measures against the occurrence of large-scale disasters|
Survey of restrictions on conflict minerals
As a member of the Responsible Minerals Trade Working Group of the Japan Electronics and Information Technology Industries Association (JEITA), Mitsubishi Electric actively addresses restrictions on conflict minerals in conformity with other industrial organizations. Surveys are conducted using the survey form (EICC-GeSI* conflict mineral report template) that is commonly used in the automobile, electric, and electronic industries, and a total of some 1,500 suppliers have been surveyed so far (FY2017). We will continue to pursue proper compliance with the restrictions, such as by requesting our suppliers to improve the accuracy of information on compliant smelters.
- EICC: Electronic Industry Citizenship Coalition
GeSI: Global e-Sustainability Initiative
Communication with Suppliers
At each office, the Mitsubishi Electric Group holds seminars that disseminate a full understanding of the Group’s Purchasing Policy and CSR Procurement Policy among suppliers. Suppliers are asked to concur with the policies and strengthen CSR initiatives at their companies as well.
In fiscal 2017, we held CSR seminars, which included references to restrictions on conflict materials, seminars dedicated to quality and safety, and a BCP seminar. Furthermore, to ensure proper response to changes in chemical substance restrictions such as the EU RoHS Directive, information sessions have been launched to disseminate proper understanding of such changes. We will maintain close communication with our suppliers and continue to organize seminars that promote further CSR initiatives.
The Mitsubishi Electric Group believes it is important to provide an understanding of the Group’s policies to overseas suppliers as well, and thus holds CSR seminars and other relevant seminars in overseas sites.
Fiscal 2017 seminars
|No. of sites||No. of participating companies|
|CSR seminar||11||Cumulative total of approx. 800|
|BCP seminar||2||Cumulative total of approx. 28|
|Information session on chemical substance restrictions||2||Cumulative total of approx. 50|
Strengthening Partnerships with Key Suppliers
Recognizing the importance of building a favorable business relationship with our business partners from a medium-term perspective, we preferentially procure materials and components from suppliers who have acquired high overall scores in a supplier selection evaluation. Suppliers who play a particularly important role in promoting our business are regarded as "key suppliers." With key suppliers of parts that influence product performance and parts that require advanced technological capabilities, we build a partnership and together engage in activities for creating cost (cost co-creation activities), such as by pursuing their joint development from the initial development stages, adopting advanced products, and promoting value engineering (VE)*.
Through these initiatives, we reduce the input of materials and minimize environmental burden by making products more compact and lightweight, and build a win-win relationship that leads to increased sales and enhanced technology capabilities for both our partners and our company.
The cost co-creation activities that we have thus pursued with our key suppliers from the initial stages of product development have produced significant results since fiscal 2004, giving us reason to actively continue the initiative.
We also recognize the need to promote initiatives to strengthen our competitiveness alongside our suppliers not only in Japan but also overseas, including in Europe, the Americas, China, and other Asian countries, in terms of cost, quality, and delivery time. To strengthen these initiatives, we actively organize presentations on VE case examples and VE lectures overseas. In fiscal 2017, we offered VE lectures in countries (India, Colombia, etc.) other than those where VE lectures have conventionally been held (the UK, the US, China, Thailand, Indonesia, Mexico, etc.). We also promote human resource development, such as by conferring an instructor’s certificate on those who have taken a writing test and VE program and demonstrate a certain level of knowledge.
Based on the awareness that it is essential to also build partnerships with outstanding suppliers overseas, in fiscal 2017 we established a system for awarding suppliers who have made particular achievements in terms of price, quality, and delivery time, as part of our ongoing initiatives for creating good relationships with our suppliers.
- VE (value engineering): a method in which the minimum cost that is required to achieve a product’s essential functions is pursued from the initial parts stage.
Providing Learning Programs on Procurement Laws and Regulations
The Mitsubishi Electric Group offers various learning programs on laws and regulations related to the operations of employees in charge of procurement activities. In Japan for example, our course on materials procurement laws provides guidance and education for thorough compliance with laws and regulations that particularly pertain to procurement activities, such as the Anti-Monopoly Act, the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, and the Construction Contractors Law. Guidance and education are also provided overseas. Based on the Code of Conduct and check sheets, learning programs strictly teach employees not to become involved in bribery, embezzlement, or any other form of action that goes against the principle of fair trade. Compliance education related to procurement is also held for local employees in charge of procurement operations overseas.
To further strengthen CSR initiatives (particularly along our supply chain), we are making greater efforts to share information on activities implemented by each office as well as instructional information, such as by holding Review Meetings for CSR Promotion in the Supply Chain and providing CSR education to employees in procurement departments.