CSR / Environment

Fair and Impartial Procurement Activities

Determining Procurement from the Standpoint of Providing Equal Opportunity and Fair Evaluation

As Sharp’s business philosophy states, “Our future prosperity is directly linked to the prosperity of our customers, dealers and shareholders,” Sharp aims for sustainable growth and mutual prosperity with all of its suppliers.

To these ends, Sharp emphasizes maintaining impartiality and fairness in all purchasing activities and chooses who it will procure local parts, materials, and equipment from by providing Japanese and overseas suppliers with an equal opportunity to do business with Sharp. This opportunity includes a fair evaluation of whether a supplier meets Sharp’s requirements for quality, standards, and performance.

Close Communication and Mutual Understanding

To ensure sustainable growth and mutual prosperity with its suppliers, Sharp is going beyond initiatives related to the quality, price, and delivery of parts and materials. Sharp is also seeking to fulfill its social responsibilities over a wide range of areas across the entire supply chain. These areas include product safety, environmental protection, human rights and labor, and health and safety.

Sharp’s basic concept, concrete policies, and requests to suppliers pertaining to procurement activities are set out in the Basic Purchasing Principles. And in the Sharp Supply-Chain CSR Deployment Guidebook, which is based on the Basic Purchasing Principles, Sharp clearly declares the implementation of CSR initiatives—such as complying with all laws, regulations, and social standards, and protecting the environment—as one of its procurement policies. Specifically, these include elimination of child/forced labor and discrimination, as well as compliance with labor related laws, such as those dealing with employees’ right to organize and their right to collective bargaining. Sharp also asks its business partners to actively promote such activities.

To deepen the understanding between Sharp and its business partners, Sharp communicates actively with supplier sales representatives on a daily basis.

Basic Purchasing Principles

Basic Procurement Concept

  1. Sharp’s procurement activities are conducted in an open and impartial manner, with a fair evaluation given to suppliers in and outside Japan.
  2. Sharp will comply with all laws and regulations, and achieve mutual prosperity with suppliers.
  3. Sharp will fulfill social responsibility such as the conservation of the environment through its procurement activities.
  4. Sharp pursues optimal quality and cost to the fullest.

Promoting CSR across the Entire Supply Chain

Fiscal 2019 Objectives Fiscal 2019 Achievements Self-evaluation
  • Continue CSR/green procurement survey in Japan; expand supplier management system
  • Finished conducting CSR/green procurement survey in Japan
  • Completed rollout and expansion of supplier management system at production/procurement bases in China and ASEAN countries (7 sites)
★★
Priority Objectives for Fiscal 2020
  • Continue CSR/green procurement survey in Japan; expand supplier management system to new factories
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Promoting CSR Awareness and Conducting Risk Assessment at Suppliers

To help its suppliers gain an understanding of Sharp’s CSR philosophy and to promote CSR-related measures among suppliers, in fiscal 2007, Sharp formulated and distributed its own Sharp Supply-Chain CSR Deployment Guidebook. The Basic Parts Purchase Agreement also includes articles on CSR initiatives, based on the guidebook, that suppliers are requested to follow.

In fiscal 2015, Sharp fully revised the content of its guidebook to conform to the RBA*1 Code of Conduct. Since then, it has revised the guidebook as needed in line with revisions to the RBA Code of Conduct. In this way, Sharp strives to comply with the increasingly sophisticated international standards for CSR.

In fiscal 2019, Japan-based business units carried out the CSR/green procurement survey at approximately 1,400 supplier plants using a survey format conforming to the RBA self-assessment questionnaire.

Following the survey, Sharp gave suppliers their survey scorecards and asked those with low scores to submit improvement plans. Through such communication with suppliers, Sharp strives to step up CSR efforts throughout the entire supply chain.

Assessment Distribution of CSR/Green Procurement Survey (Japan)

Number of Factories Assessed for CSR
(cumulative total from fiscal 2017)

Country/region Number of factories
Japan 1,438
South Korea 37
China 157
Hong Kong 39
Thailand 263
Indonesia 233
Malaysia 329
Philippines 72
Vietnam 4
Total 2,572

In China and ASEAN countries, regarding two types of supplier management systems Sharp began implementing starting in fiscal 2017, in 2019 rollout and expansion of these systems was carried out at seven production/procurement bases*2, and a cumulative total of over 2,500 factories in Japan and other countries have been asked to conduct surveys.

In fiscal 2020, Sharp will continue to carry out the CSR/green procurement survey in Japan and plans to expand the supplier management system overseas as well to new factories and other bases that do not yet have it.

Going forward, Sharp will continue to further promote CSR initiatives throughout the entire global supply chain.

  • *1 RBA: Responsible Business Alliance. Founded in 2004 by a group of leading electronics companies including Hewlett-Packard, IBM, and Dell, the RBA, formerly the Electronic Industry Citizenship Coalition (EICC), has a code of conduct covering the social, environmental, and ethical responsibilities in the global supply chain of its members in the electronics and a wide range of other industries.
  • *2 The seven sites and affiliates are: (1) SSEC (China), (2) Lianyungang Kantatsu Fine Technology Co., Ltd. (China), (3) Kanto Tatsumi Electronics (Pinghu) Co., Ltd. (China), (4) Saigon Stec Co., Ltd. (Vietnam), (5) SHK (Hong Kong), (6) SEM (Malaysia), and (7) SEM Korea (South Korea).

Responsible Mineral Procurement Initiatives

In recent years, companies have had to expand the scope of their efforts regarding the minerals, regions, and risks involved in the responsible procurement of minerals. This means not only abiding by legal frameworks such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of the United States and the EU’s Conflict Minerals Regulation but also taking a firm CSR stand in light of issues such as child labor and environmental destruction at mining sites.

Sharp respects the spirit of the Dodd-Frank Act, which came into effect in July 2010. It makes it a basic policy to not procure or use conflict minerals, and it takes appropriate action in line with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

Basic Policy on Conflict Minerals

For the purpose of not being complicit in the human rights abuses and environmental disruptions, etc. associated with conflicts in the Democratic Republic of the Congo, any raw materials, parts, products, etc. which include any conflict minerals mined illegally in the Democratic Republic of the Congo or in an adjoining country shall neither be procured nor used. In addition, appropriate measures, etc. to that effect shall be taken.

Since fiscal 2012, Sharp has been participating in the Responsible Minerals Trade Working Group of the Japan Electronics and Information Technology Industries Association (JEITA). In this capacity, Sharp has been collaborating with the RMI*1and with the Japanese automotive industry to conduct conflict mineral surveys, based on industry standard reporting templates (CMRT*2and CRT*3). Sharp uses the results of these surveys to respond appropriately to changing international trends in mineral procurement.

The awareness and PR team of JEITA’s Responsible Minerals Trade Working Group holds ongoing responsible minerals procurement orientation meetings. Sharp contributes to this industry effort by making materials for the orientation meetings.

In fiscal 2020, Sharp boosted suppliers’ understanding by telling them about videos on the JEITA website that explain international trends in responsible minerals procurement and how to fill in forms such as the CMRT and CRT. It also called on suppliers to participate in procurement surveys.

Sharp will continue to enhance the precision of surveys through ongoing improvement of its own survey system.

It will also expand and improve due diligence efforts in line with the OECD guidance, while taking into consideration new trends in mineral procurement so that it can procure minerals in a responsible manner.

Materials for JEITA’s responsible minerals sourcing inquiry briefings

  • *1 RMI: Responsible Minerals Initiative. JEITA is a partner association.
  • *2 CMRT (Conflict Minerals Reporting Template) is a free, standardized reporting template developed by the RMI.
  • *3 CRT (Cobalt Reporting Template) is a free, standardized reporting template developed by the RMI.

Audits and Education to Ensure Full Compliance with the Subcontract Act

To comply with the Subcontract Act (Act Against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors) in Japan, Sharp Corporation and its affiliated companies implement compliance checks and in-house education on an ongoing basis.

As in past years, Sharp encouraged internal voluntary reporting of compliance issues and further strengthened precautionary measures to prevent the recurrence of problems. In-house companies, business units, material purchase departments, Head Office groups, and domestic affiliated companies conducted self-audits in which they checked how well they were complying with the Subcontract Act. Sharp also held internal training sessions for domestic affiliated companies and performed periodic internal audits to raise awareness among employees of the importance of complying with the Subcontract Act.