Sustainable sourcing takes into account the long-term impact on Check all that apply

Toshiba Group promotes sustainable procurement activities through its supply chain.

What are sustainable procurement activities?
Sustainable procurement activities refer to procurement that is sustainable over the future, aiming to fulfill social responsibilities, such as following laws and regulations, social norms, protecting human rights, occupational health and safety, and the environment, including those of suppliers. In 2017, the ISO 20400 “Sustainable procurement - Guidance” was published, setting standards for various social responsibilities in procurement activities, including those for the environment and human rights.

Medium- to Long-term Vision

Contributing to solving social issues in our supply chain through appropriate procurement transactions

• Full notification of our procurement policy to our suppliers
• Obtaining consent for the Toshiba Group Procurement Policy from new suppliers

  100% of our new suppliers

• Keeping track of supplier activities, and providing instructions for improvement

FY2020 Achievements

• Revision of the Toshiba Group Responsible Minerals Sourcing Policy
• Revision of the Toshiba Group Procurement Policy
• Surveys of suppliers and providing instructions for improvement:
  • Conducted self-assessment (RBA Self-Assessment Questionnaire) and providing individual guidance based on the results
  • Conducted a responsible minerals sourcing survey
  • Conducted a supplier environmental conservation survey
• Information exchange and discussion with experts toward resolution of issues:
  • Participated in RBA member meetings
• Response to COVID-19:
  • Worked with suppliers to secure supply and minimize the impact on business

Future Challenges and Approaches

We will request suppliers to agree with and implement the Toshiba Group Procurement Policy and evaluate their CSR initiatives. We will also educate our procurement employees about important CSR issues in the supply chain, such as human rights, labor, health and safety, and the environment.

Toshiba Group's Supply Chain

Toshiba Group procures a variety of raw materials and resources from suppliers all around the world.
In terms of the composition ratio of our procurement by business sector (monetary value), energy and infrastructure accounts for 52%, electric devices account for 32%, and others account for 16%. By region, Japan accounts for 73%, Asia (including China and India) accounts for 26%, and Europe and others account for 1%.
In our efforts to promote sustainable procurement activities throughout our supply chain, Toshiba Group takes a risk-based approach that rates the importance of major suppliers with whom we have recurring business with, taking into account factors particular to the business sector and region.

Procurement component ratio by business segment and region (Japan/overseas) (FY2020, monetary value base)

Toshiba Group appropriately implements local procurement of materials, components and equipment, etc. based on the attributes of the items produced and the environment in which they are produced. Centered on production bases in each country, and also taking advantage of the International Procurement Offices (IPO), we make efforts to promote optimal procurement, including local procurement.

Toshiba Group Procurement Policy

Toshiba Group strives to build sound partnerships with suppliers through fair trading in compliance with procurement-related laws and regulations.
We request all our suppliers, who play an important role in the Toshiba Group companies’ production and services, to consent to and put into practice the Toshiba Group Procurement Policy. The policy is translated into English, Chinese and Thai to complement the Japanese version, and whenever the contents of the said policy are revised in keeping with social trends, we inform all our suppliers both inside and outside Japan.

In addition to this Procurement Policy, we have set the Toshiba Group Green Procurement Guidelines in order to address environmental issues and the Toshiba Group Responsible Minerals Sourcing Policy in order to address responsible minerals sourcing. In FY2020, we revised the Toshiba Group Procurement Policy to incorporate the Toshiba Group Responsible Minerals Sourcing Policy and clarify requests to suppliers.

We also have the Standards of Conduct for Toshiba Group for our Group officers and employees. Our corporate policy is to fulfill our CSR through fair trade and compliance with laws, regulations and social norms, as well as to build relationships of mutual understanding and trust together with our suppliers.

The history of the revision of the Toshiba Group Procurement Policy TimeContents

Feb 2005	We established the Toshiba Group Procurement Policy, and requested that our domestic and overseas suppliers comply with laws, regulations and social norms, give proper consideration to the environment, etc.
May 2008 revision	We expressly informed our suppliers of our policy on giving consideration to human rights and OHS, and requested that they apply the policy’s standards to their own procurement activities.
May 2012 revision	We declared that we give priority to suppliers who comply with laws, regulations and social norms and whether they respect human rights, when selecting new suppliers and renewing contracts. We requested that our suppliers comply with our policy to prohibit bribery to any stakeholders (taking into account international anti-corruption regulations such as the UK’s Bribery Act), human trafficking or slavery (taking into account the California Transparency in Supply Chains Act in the USA), and the use of conflict minerals (taking into account Dodd-Frank Wall Street Reform and Consumer Protection Act).
Oct 2014 revision	In the Procurement Policy, we expressly requested the promotion of activities that are in keeping with the principles of the United Nations Global Compact (UNGC) and the Responsible Business Alliance (RBA)* Code of Conduct. Toshiba is a member of these initiatives.
Feb 2021 revision	Concerning requests to suppliers, we incorporated the revision of the Toshiba Group Responsible Minerals Sourcing Policy and added guidelines that we had separately requested our suppliers to follow, namely, “Toshiba Group Green Procurement Guidelines,” “Toshiba Quality Assurance Guidelines for Suppliers,” “Toshiba Software Quality Assurance Guidelines for Suppliers,” and “Toshiba Product Security Quality Assurance Guidelines for Suppliers (Software Edition).”

• * EICC changed its name to RBA in October 2017.

Toshiba Group Procurement Policy

Toshiba Group Green Procurement Guidelines

Toshiba Group Responsible Minerals Sourcing Policy

Standards of Conduct for Toshiba Group 3. Procurement

Cooperation with Industry Organizations

In order to drive forward its CSR management through the supply chain in accordance with international standards, in June 2011, Toshiba joined the RBA, the organization for CSR promotion in the electronics industry. In order to fulfill CSR in the areas of labor, health and safety, the environment, and ethical standards throughout the supply chain, we take measures in accordance with the spirit of the RBA Code of Conduct.

In January 2017, we established the RBA Japan Network together with RBA member companies in Japan. The Network builds awareness and understanding of the RBA Code of Conduct through translation support and outreach meetings. It also conducts activities to resolve common issues. We participated in an RBA membership meeting (online meeting) held in the United States in September 2020, and the RBA Outreach Meeting in Japan held online in January 2021. In these meetings, we learned about the latest global trends, exchanged information and held discussions with experts to create a responsible supply chain.

We request suppliers of Toshiba Group companies to carry out CSR self-assessment each year in accordance with the RBA Code of Conduct depending on their respective industries, to check how they implement initiatives regarding compliance with laws, regulations and social norms, human rights, occupational health and safety, environmental conservation, and ethics. Based on the assessment results, we provide guidance to individual suppliers in accordance with their risk levels, and request that they make improvements.

RBA Membership

Structure to Promote Sustainable Procurement

In April 2020, Toshiba Group established an independent team specializing in sustainable procurement activities within the Procurement Division at Toshiba’s Headquarters. To promote sustainable procurement activities in areas such as human rights, labor, health and safety, and the environment, the specialized team collaborates with related divisions such as sustainability management, the environment, and each business division. Through our structure for promoting sustainable procurement activities, we provide information and education to Toshiba Group companies to ensure that they are fully aware of and comply with our measures.

Toshiba Group sustainable procurement promotion structure

Training Procurement Employees

Training on the Standards of Conduct for Toshiba Group, the Toshiba Group Procurement Policy, and sustainable procurement is included in our training programs for procurement employees at all organizational levels, including the training program for new employees and for transferees. In addition to these level-based programs in FY2020, we provided education to raise awareness on sustainable procurement to approximately 100 procurement employees of Toshiba Group in Japan, to further strengthen our initiatives.

Response to COVID-19 in the Supply Chain

In response to COVID-19, we have taken necessary countermeasures in collaboration with suppliers to ensure supply in order to minimize the impact on business. Specifically, we assess risks in corporate activities and logistics in regions where the infection is spreading to instigate measures to minimize the impact on our business.

Thorough Implementation of the Toshiba Group Procurement Policy and Its Monitoring

Thorough Implementation of the Procurement Policy

We request suppliers to consider CSR in accordance with the Toshiba Group Procurement Policy. In FY2014, we revised the policy and included expectations for our suppliers to act in accordance with the UN Global Compact and the RBA Code of Conduct and requested some 10,000 primary suppliers (cumulative numbers*) to abide by this revised content, and obtained their consent. In FY2020, Toshiba Group selected approximately 2,000 companies as new suppliers based on the Policy for Selecting Suppliers stipulated in the Toshiba Group Procurement Policy. We distributed the Toshiba Group Procurement Policy to new suppliers and briefed them on its content, requesting their consent, including to encourage secondary suppliers to also adhere to the policy.

• * As Toshiba Group companies conduct surveys based on each contract, we count a supplier with multiple contracts based on the number of contracts with the supplier, and therefore the number of suppliers is cumulative. Additionally, the company numbers are approximate due to there being commercially sensitive information.

Toshiba Group Procurement Policy

Monitoring

Toshiba Group monitors the status of management at suppliers that have ongoing businesses at the time of quality audits at manufacturing sites and requests improvements and provides support as necessary. For new procurement transactions, we check the supplier’s conformity with Toshiba Group’s procurement and selection policies, its manufacturing sites and management structure, and whether it complies with laws and regulations on environment, human rights, and occupational health and safety.
Toshiba Group holds briefings to explain to suppliers its policies on the environment, human rights, and occupational health and safety as well as supplier surveys to monitor their performance in accordance with the Toshiba Group Procurement Policy (including self-assessment) at each business site. In FY2020, we conducted surveys on human rights for 2,603 suppliers, health and safety surveys for 2,789 suppliers, and environmental surveys for 4,263 suppliers (the figures are cumulative numbers of Toshiba Group’s suppliers). As a result of surveys, for example, we requested the proper use of protective equipment and other measures.
Since FY2019, we have expanded the scope of the survey to suppliers of products and components, regardless of whether they are used in products under the Toshiba brand, as our primary suppliers.

Number of suppliers participating in briefings and those covered by the survey
(FY2020, Toshiba Group, cumulative)TopicParticipation in briefingsSurveys*On-site audit*Human rights/LaborHealth and safetyEnvironment

2,366	2,603	167
2,868	2,789	222
3,333	4,263	108

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

Handling of Suppliers in Breach of the Procurement Policy

If a supplier violates the standard for procurement transactions, we request the supplier to implement remedial measures and provide guidance and support as necessary. If the remedial measure is deemed to be unsatisfactory, we suspend transactions with the supplier.

Number of suppliers subject to guidance & support and suspension of transactions
(FY2020, Toshiba Group, cumulative)TopicGuidance and supportSuspension of transactionsHuman rights/LaborHealth and safetyEnvironment

93	0
193	0
68	0

Examples of supplier guidance & support (FY2020) Environmental activitiesHuman rights and OHS

Thorough implementation of the environmental policy and the Green Procurement Guidelines among the employees of suppliers Guidance on how to treat industrial waste material, etc.

Thorough implementation of 5S (Sort, Set in Order, Shine, Standardize, Sustain) management Supporting smelters to obtain conflict-free certification* Guidance on proper use of protective equipment

* Conflict-free certification: A system that has a third-party organization certify that an operator does not use conflict minerals (conflict free).

Clean Partner Line, Whistleblower System for Suppliers and Business Partners

Toshiba Group has established a whistleblower system for suppliers and business partners called Clean Partner Line, as a point of contact for our suppliers to tell us about issues or concerns regarding persons associated with the Toshiba Group. Personal information on whistleblowers, without the whistleblower’s consent, is not disclosed to anyone other than the Clean Partner Line staff. Also, what is reported by whistleblowers is handled based on strict procedures, with care taken not to treat whistleblowers and their companies unfavorably for whistleblowing. We notify our business partners of this system and request that they make use of it . Two reports were made in FY2020, and for both cases, we conducted an investigation cooperating with related divisions. We issue a directive to make improvements or a warning for any inappropriate or suspicious activity discovered in business transactions.

Partnerships with Suppliers

Toshiba Group strives to build with our suppliers’ partnerships founded on mutual trust. We are working to improve these partnerships by supporting our suppliers and organizing awareness-raising activities. We do this so that our suppliers can provide a reliable supply of high-quality, appropriately priced goods that give consideration to human rights, labor conditions, health and safety, and the environment.

Activity Example: Initiatives at Toshiba Information Equipment (Philippines), Inc.

Toshiba Information Equipment (Philippines), Inc. (TIP) is resolute to its commitment of fostering a strong and responsible business relationship with its suppliers and service providers. Every year, driven by the Essence of Toshiba upholding “Do the right thing” through compliance , TIP conducts training for business partners, including suppliers, service providers, and contractors, to deepen their understanding of social responsibilities in the social and environmental fields. The training is a two-hour refresher program on Social Accountability Management System based on activities anchored on the Responsible Business Alliance (RBA) Code of Conduct. In FY2020, the training was conducted online to prevent the spread of COVID-19. TIP believes that holding the training online has also helped promote business activities adapted to the new normal among its business partners. This training was designed to cater suppliers, contractors and in-house service providers in the hope of expanding TIP’s scope of influence in communicating the essence of compliance while strengthening the knowledge and awareness of its external business partners on social and environmental responsibility. The training was attended by Human Resource and/or Administration representatives from 34 business partners and was facilitated by a lecturer from TIP’s General Affairs and Compliance Department. The training provided a platform for the participants to share their experiences and best practices in adopting the RBA Code of Conduct.
As part of engagement with suppliers, virtual site compliance audit was also conducted to pre-selected suppliers every semester to support them to meet the level of compliance required by TIP’. With continuous education and awareness programs, together with a strong collaboration and communication, TIP hopes to intensify sustainability management promotions and compliance within its supply chain.

Online training for business partners

Ensuring Responsible Minerals Sourcing

Since Section 1502 on conflict minerals of the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) enacted in January 2013, companies listed in American Exchange are required to report on the use of conflict minerals mined in the Democratic Republic of the Congo and its adjoining countries. Toshiba Group is not a listed company, however, as a part of the supply chain of listed companies, investigates and reports to our customers.
Prior to the enactment of the Act, Toshiba Group organized an internal system to address conflict minerals issues, and established the Toshiba Group Conflict Mineral Policy and publicized it on its website in October 2011.
In recent years, however, there has been heightened risk associated with minerals sourcing, affecting not only the Democratic Republic of Congo and adjoining countries but also other conflict-affected and high-risk areas, and extending to child labor and other general human rights violations, as well as corruption and other sources of risk. In September 2020, therefore, we revised our Conflict Mineral Policy and formulated the Responsible Minerals Sourcing Policy.

Toshiba Group Responsible Minerals Sourcing Policy

Toshiba Group has put in place this policy and the provisions below in order to avoid complicity in any conflict in any high-risk area, and in order to prohibit the use of tin, tantalum, tungsten, gold and cobalt whose production is the result of human rights violations, including forced labor and child labor, environmental pollution, corruption, or other abuses.

• We undertake appropriate supply chain management, in accordance with the provisions of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas. (PDF)(3.5MB)
• We require suppliers to procure minerals from smelters that are compliant with the Responsible Minerals Assurance Process (RMAP) established by the Responsible Materials Initiative (RMI).
• We do not refrain from using minerals produced in conflict-affected and high-risk areas, provided that such minerals are sourced in regions that are not involved in conflict, human rights violations, environmental pollution, corruption, or other abuses.
• We ask our suppliers to adopt and observe the Toshiba Group Procurement Policy and Responsible Minerals Sourcing Policy, request that they provide us with information on smelters in their supply chain, and engage in dialogue and cooperation with them in order to contribute to reducing and eliminating risk in conflict-affected and high-risk areas.
• When a potential risk in the supply chain is identified, we require our supplier to take corrective action, and depending on the outcome we may suspend the transaction or take other measures.

Toshiba Group continuously gathers information on minerals sourcing and works with suppliers to conduct business operations in line with this policy.

Toshiba Group’s Promotion Structure for Responsible Minerals Sourcing

Headed by the executive in charge of sustainability, the Corporate Responsible Minerals Sourcing Management Committee, consisting of related corporate divisions, promotes activities in accordance with the Toshiba Group Responsible Minerals Sourcing Policy. Each Group company appoints a person and office in charge of responsible minerals sourcing management, who attend liaison meetings organized by the Corporate Management Committee and make use of information on the in-house website to develop comprehensive initiatives.

Toshiba Group's Promotion Structure for the Responsible Minerals Sourcing

Responsible Minerals Sourcing Survey

We conduct surveys of Toshiba Group suppliers to monitor their use of tin, tantalum, tungsten, and gold (3TG) and the smelters they deal with using the Conflict Minerals Reporting Template (CMRT).

We surveyed around 630 suppliers (cumulative number) that might use 3TG in FY2020. We also took part in preparing materials explaining the recent trends in minerals surveys and the questionnaire in the latest version of the survey as a member of JEITA Responsible Minerals Trade Working Group in order to deepen the understanding of responsible mineral procurement.

JEITA Responsible Minerals Trade Working Group (Japanese)

Cooperation and Communication with External Organizations

In order to promote the practice and awareness of responsible minerals sourcing, we affiliate actively with industry organizations and public-private partnership projects, as well as engaging in communication with NGOs.

Key examples of external cooperation and dialogues regarding conflict minerals issuesRelated organizations and projectsToshiba Group Activities

RBA (Responsible Business Alliance)	Joined in June 2011.
RMI (Responsible Minerals Initiative)	Participate in meetings and workshops as a member.
JEITA Responsible Minerals Trade Working Group	Joined in November 2011 and promote the cooperation with industry organizations.
Joined the Conflict-Free Sourcing Working Group within the Responsible Minerals Trade Working Group in May 2014, and has worked to promote and raise awareness of conflict-free minerals procurement in cooperation with the automobile and electrical industries of Japan.
As a member of this working group, issued a document continually to smelters in Japan and overseas which have not got Conflict-Free Certification in February 2017 demanding to comply with the certification program.

JEITA Responsible Minerals Trade Working Group (Japanese)

Green Procurement / Green Purchase

Green Procurement

Toshiba Group promotes green procurement as a part of our environmental considerations in the manufacturing processes.
Following our Green Procurement Guidelines established in 1999, we endeavor to preferentially procure products, parts, and materials that have a low environmental impact from suppliers who actively promote environmental protection. We revise the Green Procurement Guidelines whenever necessary in order to respond to circumstances such as stricter regulations on chemicals contained in products. We published Ver.6 of our Green Procurement Guidelines in February 2020 and Ver.6.1 in April 2021. In Ver.6, we revised Toshiba Group’s Basic Policy for the Environment and reviewed Toshiba Group List of Environment-related Materials/Substances (in Products). In Ver.6.1, we reviewed the Toshiba Group List of Environment-related Materials/Substances (in Products) again.
We ask our suppliers for their understanding and cooperation regarding green procurement, evaluate their environmental performance, and conduct inquiries and assessments of chemical substances contained in the goods procured.
With regard to environmental performance, we request our suppliers to conduct a voluntary assessment of the level of greenness of their environmental activities (Toshiba standards) based on the environmental standard ISO 14001 by using a standard format and to report on assessment results. Assessment items include suppliers’ environmental policies (corporate philosophy, environmental organizations, environmental improvement plans, environmental education, etc.), programs regarding environmental issues (air pollution, water contamination, waste, resource and energy consumption, foul odors, noise and vibration, recycling, biodiversity, etc.), and whether there are systems for managing the chemicals contained in products. In selecting suppliers, we assign priority based on the ranks of the suppliers and also encourage them to improve their level of greenness.

Green Procurement Guidelines (Japanese, English and Chinese)

The level of greenness of suppliers (FY2020)
(Priority suppliers 94.8% Rank S and Rank A)

Green Purchase: Stationery and Other Office Supplies

With regard to procurement of office equipment, stationery and other office supplies, Group companies strive to select procurement items that have lower environmental impacts. For example, environmentally conscious products such as Eco Mark certified products are registered as environmentally recommended products for procurement by Toshiba Group. We are implementing green procurement for personal computers, copiers, copier paper, etc.

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