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.
In addition to the sound network we have built with our business partners until now to ensure the quality and stable supply of our drugs, we aim to solve societal issues together with our business partners by promoting sustainability-related initiatives such as human rights, labor environments, and the natural environment through stronger collaboration. Recognizing the importance of supply chains in business continuity, we have taken up the “realization of sustainability management with business partners” as one of materialities, and are promoting it with the Representative Director, Executive Vice President, in charge of the initiative. Furthermore, important matters requiring consideration and decision making by management are reported and examined at the Sustainability Strategy Meeting, after which they are reported to the Board of Directors, where they are supervised by the Board of Directors.
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” (hereinafter referred to as the “Code”), compiling matters for which we request cooperation from our business partners, and we request their cooperation to strengthen alliances. Through these activities, we will work together with our business partners to contribute to achieving a sustainable society.
In light of changes in the external environment and the importance of sustainable procurement, we are intensifying our activities with a view to prioritizing signing contracts with business partners who are willing to cooperate with our sustainable procurement activities. Currently, we select important business partners in terms of transaction amount, types of industry transactions that are important to our pharmaceutical business (research and development, manufacturing, and logistics, etc.), types of industries with high sustainability risk based on third-party data, and the existence of substitute suppliers, and promote activities by prioritizing direct and secondary business partners.
We hold briefing sessions with important business partners to share our way of thinking and Code regarding sustainable procurement, request their cooperation, and obtain their written consent. In addition, we conduct risk assessments to identify potential risks in the supply chain and, depending on the situation, conduct on-site audits and request for corrective measures to be taken. Moreover, when signing contracts with new business partners, we include sustainability risks among other items in checklists, and for companies in industries where risks are a concern, we obtain a letter of consent from such companies and progressively request that they conduct risk assessments.
We use EcoVadis’s sustainability assessment system (hereinafter referred to as "EcoVadis") as our first choice for risk assessment. EcoVadis comprehensively evaluates companies in four areas, namely, environment, labor and human rights, ethics, and sustainable procurement, through questionnaires customized for each industry, company size, and country. The company also offers educational materials, such as scorecards with detailed feedback and e-learning courses, to help assessed business partners learn and improve their sustainability management practices and streamline their own sustainability performance. Business partners who request to participate in the assessment can evaluate their supply chain sustainability based on highly objective, reliable, and comparable assessment results. As we seek to increase value through collaborations with our business partners, we believe that EcoVadis's assessment system is the best fit for both our company and our business partners.
For business partners who share their EcoVadis results with us at our request, we stipulate that we will request a re-examination based on their overall EcoVadis score and theme-based scores. For business partners whose scores do not meet our standards, we conduct on-site audits to confirm the status of those companies and provide support for improving sustainability risks.
In addition, business partners that have already undergone sustainability assessments (PSCI's SAQ, RBA's SAQ, etc.) conducted by third-party organizations as risk assessments other than EcoVadis are asked to share their assessment results as an alternative to EcoVadis to confirm the status of their sustainability initiatives.
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| FY 2021 | FY 2022 | FY 2023 | Plans for FY2024 and beyond | |
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| Risk Assessment |
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By FY2023, we will select important business partners from the top 98% of business partners by transaction value, expanding the scope of our activities from 180 companies last year to 410 companies (82% of transaction value). As a result, consent forms were collected from 299 companies, and risk assessments were conducted and responses were received from 139 companies. Furthermore, we conducted an on-site audit of one business partner whose EcoVadis score did not meet our standards, and confirmed that there was no need for a corrective action plan. In addition, we asked 42 intermediate processors that we do business with to respond to risk assessments regarding industry-specific sustainability risks in the area of industrial waste treatment, which is considered to have high sustainability-related risks from the perspective of global environmental preservation. In FY2024, we plan to proceed with activities for our secondary business partners in APIs and formulations, which are indispensable for the manufacture of pharmaceuticals, the most important products for our line of business (as of the end of March 2024).
| FY2021-FY2023 progress (as of the end of March 2024) |
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| Number of companies subject to consent form | 410 companies |
| Number of companies submitting consent | 299 companies |
| Number of companies subject to risk assessment | 234 companies |
| Number of companies participating in risk assessment | 139 companies |
| Number of companies that have conducted on-site audits | 1 company |
| Number of companies requested corrective actions | 0 company |
| （Number of companies discontinued based on audit results） | 0 company |
Task force meetings are held for those in charge of promoting sustainable procurement activities in each division to share the progress of sustainable procurement, and to disseminate the importance of, and our way of thinking regarding, sustainable procurement. We also conducted an e-learning course for all employees to promote a better understanding of sustainable procurement
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.
When newly appointing third parties, such as contractors or agents, we conduct due diligence using an anti-bribery checklist to confirm whether there are any red flags regarding risks, including checking country-specific risks based on the Corruption Perceptions Index (CPI), prior to signing the contract. 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.