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 2018 Objectives Fiscal 2018 Achievements Self-evaluation
  • Full-scale rollout and expansion of supply chain CSR management systems
  • Full-scale rollout of supplier management system at production bases in China and ASEAN countries (9 sites); evaluation carried out on 900 suppliers
  • Expanded supplier management system to production/procurement bases in China and ASEAN countries (7 sites)
★★
Priority Objectives for Fiscal 2019
  • Continue CSR/green procurement survey in Japan; expand supplier management system
  • Self-evaluation: ★★★ Achieved more than targeted / ★★ Achieved as targeted / ★ Achieved to some extent

Promoting Awareness among Suppliers and Conducting Surveys

To help its suppliers gain an understanding of Sharp’s CSR philosophy and to promote CSR-related measures among suppliers, in 2007, Sharp formulated and distributed its own Sharp Supply-Chain CSR Deployment Guidebook compliant with the RBA*1 Code of Conduct. The Basic Parts Purchase Agreement also includes articles on CSR initiatives, based on the guidebook, that suppliers are requested to follow.

Furthermore, Sharp is raising the level of CSR initiatives throughout the supply chain. Sharp continues to conduct CSR/green procurement surveys of suppliers, based on the guidebook. Suppliers who are given low marks are requested, among other efforts, to submit a corrective action plan.

In fiscal 2015, Sharp fully revised the content of its guidebook to conform with the global-standard EICC 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 2018, in some of its Japan-based business units, Sharp continued with the CSR/green procurement survey but with questions unique to Sharp added to the RBA self-assessment questionnaire.

Further, in China and ASEAN countries, Sharp began the full-scale introduction of two new types of supplier management systems at nine major production sites*2 with the goal of carrying out a multifaceted and efficient evaluation of the QCD (quality/cost/delivery) of its suppliers and their CSR performance. This evaluation was carried out on approximately 900 suppliers.

Sharp is also pushing forward with expansion of this system to seven more production/procurement sites*3 in China and the ASEAN region.

In fiscal 2019, Sharp will continue to carry out the CSR/green procurement survey in Japan and plans to expand the supplier management system to Europe and America.

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

  • *1 RBA: Responsible Business Alliance. An influential international organization promoting CSR in the supply chain.
    It changed its name from Electronic Industry Citizenship Coalition (EICC) in October 2017.
  • *2 The nine production bases are (1) SOCC (China), (2) WSEC (China), (3) SATL (Thailand), (4) SMTL (Thailand), (5) SOEM (Malaysia), (6) SMM (Malaysia), (7) SEID (Indonesia), (8) SSI (Indonesia), and (9) SPC (Philippines).
  • *3 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).

Number of suppliers that underwent CSR surveys in fiscal 2018

Japan 124 suppliers
China 135 suppliers
Thailand 216 suppliers
Indonesia 223 suppliers
Malaysia 294 suppliers
Philippines 66 suppliers

System introduction training at a Chinese production base

Responsible Mineral Procurement Initiatives

Sharp respects the spirit of the Dodd-Frank Wall Street Reform and Consumer Protection Act of the United States, 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.

Recently, the scope of minerals, regions, and risks subject to the responsible mineral procurement demanded of companies is expanding. This is due to legal frameworks such as the Dodd-Frank Act and the EU’s new Conflict Minerals Regulation. Also, from a CSR perspective, there is a need to include issues such as child labor and environmental destruction at mining sites.

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*1 and with the Japanese automotive industry to conduct conflict mineral surveys, based on industry-standard reporting templates (CMRT*2 and CRT*3). Sharp uses the results of these surveys to respond appropriately to changing international trends in mineral procurement.

A notable example of such action taken in fiscal 2018 was Sharp, together with JEITA’s Responsible Minerals Trade Working Group, sending outreach letters directly to smelting works and refineries suspected of involvement in procurement risks stipulated by OECD Guidance Annex II*4, the United States’ OFAC regulations*5, and other regulatory guidelines and standards.

In addition, as it does every year, Sharp attended a conflict minerals survey briefing sponsored by JEITA’s Responsible Minerals Trade Working Group, and used the opportunity to provide suppliers with a deeper understanding of recent trends and to ask for their cooperation with surveys.

In fiscal 2019 again, Sharp will enhance the precision of surveys by continuously improving 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.

At a conflict minerals survey briefing sponsored by JEITA (Osaka venue)

  • *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.
  • *4 Risks stipulated in Annex II of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.
  • *5 Sanctions-related regulations of the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).

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.