CSR Management in the Supply Chain

In order to fulfill our CSR obligations with regard to human rights, labor and the environment in cooperation with our suppliers, and aiming to promote our own CSR activities, KIOXIA Group ensures that its suppliers are also committed to improving working conditions and reducing the environmental impact of their operations.

KIOXIA Group's Supply Chain

KIOXIA Group procures a variety of raw materials and resources from suppliers all around the world. Overseas suppliers account for 53% of our total procurement.

Procurement Ratio by Region (FY2019)

Overseas 53%, Japan 47%

KIOXIA Group Procurement Policy

KIOXIA Group strives to build sound partnerships with suppliers by means of fair trading in compliance with procurement-related laws and regulations.
We request our suppliers, all of whom play an important role in KIOXIA Group companies' production and services, to agree to and put into practice the KIOXIA Group Procurement Policy. Whenever the contents of the Policy are revised to reflect changing social conditions, we inform all of our suppliers both inside and outside of Japan.
In addition to this Procurement Policy, we have formulated the KIOXIA Group Green Procurement Guidelines in order to address environmental issues, and the KIOXIA Group Responsible Minerals Sourcing Policy to regulate the sourcing of materials from conflict-affected and high-risk areas.

Following the Industry's Code of Conduct

To promote CSR in the field of human rights, labor, occupational health and safety, environmental conservation, and ethical standards throughout our supply chain, KIOXIA Group promotes CSR activities within our group. We request our suppliers to adopt a similar approach, in the spirit of the United Nations Global Compact (UNGC) and the Responsible Business Alliance* code of conduct.

Responsible Business Alliance (Open in new window.)

* Prior to October 2017, the Electronic Industry Citizenship Coalition

Promotion of Supply Chain Management

KIOXIA Group has set up a dedicated planning organization within the procurement department at KIOXIA's Head Office. It works to promote fair dealings with all our suppliers as well as CSR management across our supply chain.
The organization coordinates with various business divisions and related divisions such as the CSR group and the Environment group.

Promotion and Monitoring of CSR Procurement

Promotion of CSR Procurement

With regard to promotion, we request our approximately 600 regular suppliers and all new suppliers to pursue CSR activities in accordance with the UN Global Compact and the RBA Code of Conduct.

Monitoring

Kioxia Group continuously monitors the status of CSR management at manufacturing sites in our regular supply chains during quality audits, requesting improvements and providing guidance where necessary.
In addition, depending on the annual procurement amounts, we ask our suppliers to conduct a CSR survey (RBA-SAQ*) based on the self-assessment method provided by the RBA to confirm the status of their CSR promotion related to such matters as the environment, human rights, labor management, health and safety, and ethics at each company and plant.
For new procurement transactions, we check the supplier's conformity with KIOXIA Group's procurement and selection policies, the supplier’s manufacturing sites and management structure, and whether these comply with appropriate laws and regulations.
While continuing to support improvements and provide information on the environment, human rights, labor management and occupational health and safety, Kioxia Group conducts surveys (including asking for self-monitoring) of our suppliers and their status of improvement.

*SAQ: Self-Assessment Questionnaire

Number of suppliers participating in briefings and surveys (FY2019, KIOXIA Group, Cumulative numbers)

Topic Briefings Surveys* Site Audit*
Human Rights, Safety 35
127
1
Environment 123
129
3
Total 155
256
4

*Includes self-inspections using the RBA SAQ (Self-Assessment Questionnaire), third-party audits, and surveys/audits using our own standards.

Actions in the Event of Procurement Policy Breaches by Suppliers

If a supplier violates our procurement policies, we request them to implement remedial measures and provide guidance and support as necessary. If their remedial actions are deemed to be unsatisfactory, we suspend transactions with that supplier.

Suppliers subject to guidance & support or suspension of transactions (FY2019, KIOXIA Group, cumulative numbers)

Topic Support for Improvement Guidance and Support Suspension of Transactions
Human Rights, Safety 10 1
0
Environment 32
0 0

Examples of supplier guidance and instructions (FY2019)

Environmental Activities Requesting and ensuring that suppliers of packing materials do not use phthalate esters, in accordance with the revised RoHS (Restriction of Hazardous Substances) regulations banning their use
Human Rights and Occupational Health & Safety Requesting supplier plants to modify the terms of employment

Responsible Minerals Sourcing

Since Section 1502 of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was enacted in January 2013, companies listed on U.S. stock exchanges are required to report any use of conflict minerals mined in the Democratic Republic of the Congo and its neighboring countries. KIOXIA Group is not listed on any U.S. exchanges; however, as we form part of the supply chain of companies that are, we have started to investigate usage of these minerals.
From March 2021, the KIOXIA Group has been advancing from an ethical and humanitarian perspective the procurement of minerals based on the KIOXIA Group Responsible Minerals Procurement Policy. This stipulates that KIOXIA will not use as raw materials tin, tantalum, tungsten, gold, or cobalt obtained from the Democratic Republic of Congo and neighboring areas, or from other conflict- and high-risk areas (CAHRAs)  where inhumane acts such as human trafficking, slavery, forced labor, child labor, abuse, or war crimes are suspected.

KIOXIA Group's Advancement of Minerals Sourcing

The Responsible Minerals Sourcing Working Group, incorporating members from relevant corporate divisions, promotes activities in according with the KIOXIA Group Responsible Minerals Sourcing Policy. KIOXIA Group is committed to sharing information about these activities.

Minerals Sourcing Survey

We request KIOXIA Group suppliers to conduct responsible minerals sourcing, and survey these suppliers regarding their use of minerals, as well as the details of their mineral smelters. In FY 2019, we surveyed 85 suppliers where we perceived there might be a risk that so-called “3TG” minerals – tin, tantalum, tungsten, and gold – were being used.

In addition, we ask our suppliers to source minerals from RMAP-conformant smelters and refiners certified under the Responsible Materials Initiative (RMI).

 

In addition, we engage in initiatives related to the appropriate procurement of minerals within and outside of Japan and conduct initiatives through RMI and as a member of the Japan Electronics and Information Technology Industries Association (JEITA) Responsible Minerals Trade Working Group. From 2021, we have added cobalt to the list of minerals surveyed.

 

Green Procurement

The KIOXIA Group aims for the realization of a sustainable society, as formulated in Kioxia Group’s Environmental Policy.
In support of this aim, we have formed a Green Procurement Working Group centered on our Environment, Quality Control and Procurement divisions. We have also formulated Green Procurement Guidelines aimed at ensuring compliance with the laws and regulations of each country and at reflecting customers’ requirements and other requests, and we periodically update these. The guidelines are based on our philosophy of reducing the environmental burden caused by materials procurement; they summarize our requirements for the handling of hazardous chemical substances and are shared with our suppliers.

In addition, we conduct a thorough assessment of the environmental impact of chemical substances in our components and products from the design and development stage and avoid wherever possible the use in our production processes of substances whose sourcing places a large burden on the environment, thereby striving to reduce our environmental footprint.
Through these initiatives, we will continue to collaborate with our suppliers and strive to manage chemical substances appropriately and to contribute to the realization of a better global environment.

Introducing the CSR activities of the KIOXIA Group which contribute to the development of a sustainable society.

KIOXIA Group will continue to develop a sustainable society by contributing to the SDGs through its business.