Supply chain management

The DOWA Group is working to further enhance corporate social responsibility (CSR) while strengthening partnerships with its suppliers by helping them understand the importance of CSR in the supply chain. We will also work to conserve biodiversity by conducting our business activities in a manner that takes biodiversity and ecosystems into consideration throughout our supply chain.

In order to promote sustainability throughout our supply chain, the Dowa Group established the “Dowa Group CSR Procurement Guidelines” for our suppliers in FY2014, and has been revising the Guidelines (currently in Version 1.6) as necessary in response to social conditions. Based on our “CSR Procurement Policy” and “Responsible Mineral Procurement Policy,” the Guidelines present the Dowa Group’s basic approach and code of conduct for CSR procurement, and we request that our suppliers understand our promotion of sustainability management and comply with the Guidelines. We also inform our suppliers of our compliance with the Guidelines when we distribute our annual self-checklist and when we start new transactions with them. In addition, our CSR procurement-related policies are widely publicized on our website.

We are implementing initiatives in which suppliers themselves conduct self-assessments of their sustainability promotion systems and actual conditions, etc., using a self-checklist based on the CSR Procurement Guidelines. Through this process, we continuously identify and evaluate issues related to legal compliance and fair trade in the supply chain, optimal quality and fair prices, establishment of stable supply systems, sustainability (human rights and labor, health and safety, environmental conservation, social and community contributions), protection of information, and management systems.
In FY2022, we distributed a self-checklist to approximately 140 of our major suppliers and new suppliers. Through feedback reports, suppliers who responded to the self-checklist are informed of our expectations and items for improvement, and are requested to promote sustainability.

Since fiscal 2015, we have been conducting CSR audits as necessary to identify high-risk suppliers in terms of environmental, social, etc., based on the results of self-checklists and other items answered by our suppliers. CSR Procurement Guidelines, as well as interviews and document verification based on the results of the self-checklist, and the status of site safety and environmental initiatives. CSR audits are conducted by a team consisting of members of the Sustainability and Procurement Divisions, and personnel in charge of materials at suppliers also participate in the audits to strengthen relationships of trust with suppliers and to further disseminate our CSR procurement activities within the company.

We provide feedback on the audit results in the form of a report after the CSR audit in order to promote the sustainability activities of suppliers who cooperate with the audit. If the specific improvement methods or details of the points pointed out are unclear, we will support improvement by sharing best practices and providing guidance on how to respond.

Responsible Procurement of Minerals Companies that handle metals such as those that comprise the DOWA Group have a social responsibility to procure minerals while remaining mindful of human rights, the environment, ethics, and similar concerns. We live in a time when products that utilize metal, such as automobiles, electronic devices, and electric appliances, continue to grow in number, are distributed around the world, and support us in our daily lives. Regardless of whether information is disclosed or not, we believe that the procurement of ore, which is the raw material for these products, should not prolong conflicts or come at the cost of human rights violations.

The Company has established the DOWA Group Responsible Minerals Procurement Policy and does not use minerals as raw materials if those minerals may be used to fund organizations involved in human rights violations and other illegal activities in conflict-affected or high-risk areas. We conduct due diligence for all suppliers from whom we procure materials, including tantalum, tungsten, gold, silver, tin, and zinc, and respond appropriately whenever a potential risk is identified. During our due diligence process, we act in accordance with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

In addition, the DOWA Group produces various types of metals, including gold and silver, at its domestic smelters. These smelters are regularly audited by thirdparty organizations to ensure that our metals are safe for all customers and that our systems and practices for responsible mineral management are being audited. In our effort to ensure responsible mineral procurement, we have built a metal supply system that is not connected to conflicts or human rights violations.
We consider the establishment of this system to be a necessary part of our role as a smelter operator upstream in the supply chain.

We have undergone the independent third-party assessments of responsible mineral procurement in accordance with the “LBMA Responsible Silver Guidance” and the “Joint Due Diligence Standard for Copper, Lead, Molybdenum, Nickel and Zinc”.

With regard to supply chain management, there is a social demand to address not only raw material procurement but also the entire supply chain related to a series of business processes from development, production, sales, and services, and the HD Group also receives CSR procurement-related requests from our suppliers. In order to respond to these requests promptly and appropriately, the HD, operating companies and operating subsidiaries shall cooperate with each other and respond to such requests among their sales, manufacturing, procurement, human resources, general affairs, sustainability, and other divisions.

Since the DOWA Group primarily engages in business-to-business transactions, disruptions along the supply chain will have a severe impact on the production and sales activities of customers receiving our services or products. Therefore, through CSR procurement, we regularly confirm with our major suppliers that they have in place a BCP to ensure that we can restore and continue business promptly.

The Dowa Group holds study sessions on CSR procurement once or twice a year at meetings of purchasing managers within the Group, in order to reflect the spirit expressed in the CSR Procurement Policy and CSR Procurement Guidelines in its procurement activities. The meetings are designed to share information on sustainability risks in the supply chain and to raise awareness by learning about the importance of management and other aspects of sustainability.

We actively participate in activities led by the Global Compact Network Japan (GCNJ), a local network of the UNGC in Japan. We have participated as a member of the GCNJ Supply Chain Working Group since 2017, and have created educational tools for CSR procurement and practical tools for CSR procurement managers with other participating companies to have the spirit of the four areas and ten principles of the UNGC be reflected in the supply chain.