As social structures evolve due to factors such as technological innovation and globalization, the importance of supply chain management has increased for continuing business activities. Under this external environment, in order to respond to emerging social issues, such as human right abuses, issues related to the working environment, etc., and to contribute to achieving a sustainable society, it is important to develop management systems and enhance initiatives along with all the business partners in our supply chain.
We recognize the importance of supply chains in business continuity. In FY2021, we specified "supply chain management" as a materiality again. We appointed a Member of the Board of Directors and Senior Executive Officer as a person responsible. Important matters requiring examination and decision making from the management layer are reported and examined at the Sustainability Strategy Meeting.
We have built a sound network with our business partners for quality assurance and a stable supply of pharmaceuticals. While implementing the further strengthening of alliances, we promote initiatives related to human rights, working environment, and natural environment and aim to resolve social issues with our business partners.
We require all of our employees involved in procurement activities to comply with the "Basic Policy for Procurement Activities" in order to engage in fair, just, and highly transparent procurement activities. We established the "ONO Sustainable Procurement Code for Business Partners," compiling matters for which we request cooperation from our business partners, and we request their cooperation to strengthen alliances.
For persons responsible for promoting the sustainable procurement activities of each division, we are disseminating the importance of sustainable procurement and our ideas at the taskforce meeting. We are also preparing for e-learning in view of the understanding and dissemination of sustainable procurement to all employees.
We have shared our ideas related to sustainable procurement at briefings principally with our business partners of the production departments and conducted a cycle consisting of a risk assessment step and a corrective step. We used EcoVadis's sustainability assessment system ("EcoVadis") for risk assessment. Although none of our suppliers were classified as being high risk in terms of sustainability, we held discussions with several companies that received assessments to check their activities related to the sustainability and progress of the corrective action plan. We then confirmed at the following EcoVadis's assessment that these business partners had enhanced their activities.
In consideration of changes in the external environment and the importance of sustainable procurement, in FY2021, in order to identify and organize risks related to sustainability in our supplier chain, we conducted risk analysis based on procurement amounts, sustainability risks by industry (governance of compliance and ethics, social issues related to human rights and work safety, environment, etc.), the existence of substitute suppliers, country of production, and other information, and from FY2022, we specified "sustainable procurement" as a materiality again and, thereby, enhanced our activities.
In view of concluding future agreements with our business partners who can cooperate with our sustainable procurement activities, including obtaining consent forms, implementing risk assessments, responding to corrections if risks are found, etc., in FY2022, we built an internal system to promote the expansion of business suppliers subject to the activities and established standards, etc. In addition, we revised the "ONO Sustainable Procurement Code for Business Partners" and prepared consent forms. We determined a priority order based on the results of the risk analysis conducted in FY2021 and the impact on our business, held briefings, etc. for our business partners, and started to obtain consent forms. In FY2022, we received consent forms from 132 companies out of 180 target companies (as of the end of March 2023).
In FY2023, towards the establishment of a management system, we will implement risk assessment at companies from which we obtained consent forms and will expand the number of companies from which we obtain consent forms. Companies subject to risk assessment are selected in consideration of the impact on our business and of sustainability risks of the industry based on third-party data.
|Schedule in FY 2023 and after
|Number of target companies
|Number of companies submitting consent
|Number of companies included in risk assessment (EcoVadis)
In the risk assessment in FY2022, like in previous fiscal years, none of our suppliers were classified as being high risk in terms of sustainability.
For more information on Supply Chain Management, see also ONO’s Approach to Sustainability.
In September 2023, ONO joined PSCI (Pharmaceutical Supply Chain Initiative). PSCI is a non-profit organization established in 2006 by 21 major pharmaceutical companies. Through the supply chain, it aims to improve results for society, the economy, and the environment, while maintaining working environments for workers, safe processes and plant facilities, economic development, and a clean environment for local communities. Through PSCI, suppliers can avoid the duplication of receiving risk assessments and audits by multiple pharmaceutical companies, while pharmaceutical companies can operate efficient and effective audit systems. It therefore results in advantages for both pharmaceutical companies and suppliers. We will engage in activities to conform to PSCI’s principles of responsible supply chain management in terms of ethics, working conditions, health and safety, environment preservation and related management systems in order to enhance sustainable corporate value for both ONO and our partner companies.
We agree with the purport of the "Council on Promoting Partnership Building for Cultivating the Future," promoted by the Cabinet Office and the Small and Medium Enterprise Agency and we announced the "Declaration on Partnership Building." We aim to build new partnerships by implementing alliances as well as coexistence and co-prosperity with our business partners in the supply chain and companies promoting the creation of value.
Before appointing a third party such as a subcontractor or an agent, we perform due diligence using an Anti-bribery Check Sheet, including checking country risks based on the Corruption Perceptions Index ("CPI"), etc., to see if there are any red flags. We have developed a process through which we submit the third party’s replies to our detailed question sheet to the Corporate Compliance Officer to get his/her approval before appointing the third party in case we identify a red flag.
When we outsource animal experiments, we ensure that the outsourcing contractor complies with the laws and standards of the relevant country concerning animal welfare. We also make every effort so that such an outsourcing contractor complies with our standards as much as possible. Please click here for our thoughts on ethical considerations in animal experiments.