Procurement Policy
Basic concepts
Through the entire supply chain, the Group hopes to contribute to realizing a sustainable society by fulfilling its social responsibilities, such as "consideration for safety and security," "global environmental conservation," "prevention of corrupt practices," and "respect for human rights." We aim for mutual growth with our suppliers by deepening our relationship of trust with them through better communication based on the Nankai Group Material Procurement Policy and the Green Procurement Guidelines, and by working together to build a strong and sustainable supply chain system.
Nankai Group Material Procurement Policy: Requests to our business partners
We recognise that we have a responsibility to promote sustainable procurement in order to realise a sustainable society. To achieve this, we believe that the Nankai Group should work across the entire supply chain to promote sustainable procurement that contributes to solving ESG issues. Therefore, in August 2022, in addition to the existing Green Procurement Guidelines, we established the Nankai Group Material Procurement Policy, which covers all social issues such as human rights, ethics, labour, health and safety, the environment, and anti-corruption, as follows.
Nankai Group Material Procurement Policy
Designated on August 1, 2022
The Nankai Group created the following procurement policy for the procurement of materials.
Throughout this process, we will work with our business partners and fulfill our social responsibilities throughout our supply chain, such as being mindful of safety and security, preserving the global environment, preventing corruptions, and respecting human rights, as our contribution to the realization of a sustainable society.
Safety/security-first procurement
We will put the safety and security of our customers before everything else. For material procurement, we will also pursue materials that will help in ensuring and improving safety further.
Procurement of high-quality materials
To provide safe and secure products and services, we will procure high-quality and reliable materials.
Procurement at appropriate prices
We will strive to procure high-quality materials at appropriate prices.
Pursuing business partners who are able to provide steady supplies and meet the delivery date
We will broadly pursue business partners who can always provide a steady supply of the materials we need by the delivery date.
Conserving the global environment
We have been working actively to reduce environmental stress and protect the environment. Together with our business partners, we will promote green procurement while paying attention to environmental impact.
Respecting human rights, and ensuring a safe and hygienic environment
Together with our business partners, we will respect the human rights of workers, and ensure a safe and hygienic work environment.
Fair and just trade
In our procurement process, we will pay attention to fairness, equality, and transparency and prevent corruption. We will also not have relationships with anti-social forces.
Complying with the laws and social rules, and managing information appropriately
We will comply with the laws and social rules and appropriately manage the information that we deal for procurement, such as intellectual property information and personal information.
Developing trusted relationships with our business partners
We will work together with our business partners to develop robust and sustainable supply chain systems and look to mutual growth, by expanding our communication with our business partners and mutually trusting each other, to provide products and services that will make our customers happy.
Requests to our business partners
We urge our business partners to understand the Nankai Group’s Environmental Philosophy, Basic Policy on Anti-corruption, and Nankai Group Human Rights Policy, and work on the following initiatives based on the Nankai Group Material Procurement Policy. We urge them to ask their suppliers to cooperate as well.
< Requests to our business partners >
Pursuit of safety and security
・Understanding the Nankai Group’s management policy to thoroughly ensure safety and security
・Continuous development and improvement of materials to ensure and improve safety
Provision and steady supply of high-quality materials at appropriate prices by the delivery date
・Continuous efforts to improve quality and save costs
・Developing a structure that will allow a steady supply of materials by the delivery date, and provide sufficient support after purchase
Efforts to conserve the global environment
・Promoting initiatives that consider the environmental impact, such as green procurement
Respecting human rights, and ensuring a safe and hygienic environment
・Respecting the human rights of workers, including forbidding child labor and forced labor
・Ensuring a safe and hygienic environment
Ensuring fair and just trade
・Forbidding corruptions such as bribery
・Not having relationships with anti-social forces
Complying with laws and social rules, and managing information appropriately
・Complying with laws and social rules
・Appropriately managing information concerning procurement, such as intellectual property information and personal information
Developing trusted relationships
・Enhancing communication to build trusted relationships
End
Risk assessment and addressing issues in the supply chain
Until fiscal 2021, we have been conducting surveys based on our Green Procurement Guidelines to understand our suppliers' environmental initiatives and to facilitate ongoing communication.In fiscal 2020-2021, we conducted a survey of 100 suppliers out of approximately 440 that supply railway equipment and materials. Approximately 25% of these suppliers did not have an environmental policy or had not decided on a responsible department or manager, so we encouraged them to make improvements.
In fiscal year 2022, we disseminated the newly established ‘Nankai Group Materials Procurement Policy’ to all our business partners via our website, publishing it in both Japanese and English. Furthermore, we directly emailed approximately 440 companies among our business partners with whom we have ongoing transactions, informing them of the policy and requesting their cooperation in its implementation. Simultaneously, to identify key challenges, we conducted a supplier survey covering the following items in accordance with the Nankai Group Materials Procurement Policy, targeting the top 100 suppliers by transaction value from the previous fiscal year. This represents approximately 80% of all our business partners based on transaction value criteria. The survey achieved a 100% response rate, with all 100 companies responding.
Main questionnaire items
Status of environment-related promotion (existence of environmental policies and regulations)
Compliance with environmental laws and regulations
Status of Initiatives Regarding Energy Efficiency, Miniaturisation, Weight Reduction, and Water Usage Reduction
Response to Requests for Disclosure of Environmental Information to Business Partners
Environmental Protection Activities
Pursuit of safety and security, stable supply of materials, and on-time delivery
Human rights and health & safety policies and regulations
Respect for workers’ human rights, including prohibition of child labor and forced labor, and assurance of a safe and healthy environment
Policies and regulations on the prevention of bribery and other corrupt practices and the blocking of relationships with antisocial forces
Information security policies and regulations
Should the survey results indicate areas requiring improvement, we shall conduct awareness-raising activities as appropriate. In particular, where compliance with laws and regulations cannot be confirmed, we will refrain from commencing transactions with new business partners and, for existing partners, terminate or suspend business relationships in accordance with our policy.
The 2022 survey did not identify any such significant issues. However, as 26% of business partners had either incomplete policies or no designated department responsible for environmental, human rights, anti-corruption, or information security matters, we judged it crucial to first request the establishment of these policies. We will continue to actively encourage improvements in this area.
Furthermore, we recognised that, particularly among small and medium-sized business partners, initiatives concerning environmental considerations are still developing and represent a significant challenge. To address this, we will consult with our business partners to understand the reasons for their lack of progress, providing information and encouragement to facilitate solutions.
In fiscal year 2023, we emailed requests for policy establishment to these companies (26 firms). We visited some of them directly (5 firms) to explain the importance of establishing policies and request their cooperation. During these visits, we confirmed that staffing shortages were a barrier to policy development. Consequently, we are providing support, such as sharing our own readily applicable implementation examples for reference.Furthermore, some of the visited business partners have endorsed our approach and are progressing with measures to establish policies.
*We also conduct similar questionnaire surveys when commencing transactions with new business partners. Where insufficient measures are identified, we provide appropriate awareness-raising support.
Green Procurement Guidelines
We have established an Environmental Philosophy and Environmental Policy to actively reduce environmental stress and protect the environment, and established the Green Procurement Guidelines as part of the effort. To find out more, read this.
