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 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)

Procurement Ratio by Region (FY2019)

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 Conflict Mineral Policy in order to regulate the sourcing of materials from conflict 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.

* Prior to October 2017, the Electronic Industry Citizenship Coalition

Responsible Business Alliance (Open in new window.)

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.
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 governing the environment, human rights and occupational health and safety.
While continuing to support improvement and provide information on the environment, human rights, and occupational health and safety, Kioxia Group conducts surveys (including asking for self-monitoring) of our suppliers and their status of improvement.

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

Addressing the Conflict Minerals Issue

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 investigate and report to those customers.
For humanitarian reasons, KIOXIA Group's policy prohibits the use of raw materials such as tin, tantalum, tungsten, and gold mined in the Democratic Republic of the Congo and in any neighboring countries where human rights violations occur.

KIOXIA Group's Promotion of the Use of Conflict-Free Minerals

The Conflict Minerals Management Committee, incorporating members from relevant corporate divisions, promotes activities in according with the KIOXIA Group Conflict Mineral Policy. KIOXIA Group is dedicated to sharing information about these activities.

Conflict Minerals Survey

We survey KIOXIA Group suppliers on their understanding of conflict minerals and the use of these, as well as on the details of their mineral smelters. We surveyed 85 suppliers that might be using the so-called “3TG” minerals – tin, tantalum, tungsten, and gold – in FY2019.

Green Procurement

The "Green Procurement Guidelines" stipulate our basic policy for selecting and procuring materials or components that have a low environmental impact; they also outline our requests to all suppliers. The purpose is to work together with our suppliers on global environmental conservation by sharing and cooperating on relevant issues.