As social structures evolve due to factors such as technological innovation and globalization, the importance of sustainable procurement 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 have taken up “improving public trust” as one of ONO’s materialities. 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. ONO will promote these initiatives with the Representative Director, Executive Vice President in charge, and are working to promote activities to improve public trust. Furthermore, important matters requiring consideration and decision making by management are reported and examined at the Sustainability Strategy Meeting, etc., 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 “Procurement Activities Basic Policy” 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. The “Procurement Activities Basic Policy” and the Code are revised appropriately according to changes in society and the global environment. 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. Prior to entering into a new contract, we check country-specific risks based on the Corruption Perceptions Index (CPI).
Furthermore, as a pharmaceutical company that handles ethical drugs, we are characterized by many specialized activities, including not only scientific activities such as research and development and manufacturing, but also the distribution of pharmaceuticals and providing information on such drugs. Therefore, we believe it is important to manage risks that are specific to the pharmaceutical business and products throughout the entire value chain, including not only general compliance items such as corporate ethics, respect for human rights, and information management, but also health and safety management at each stage of drug discovery research, clinical development, drug manufacturing, and drug distribution, as well as the impact on the local environment. Accordingly, in our sustainability management with business partners, we select important business partners by assessing sustainability risks based on third-party data for each transaction amount and industry sector, and promote activities for 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 scorecards with detailed feedback to help assessed business partners improve their sustainability performance. Business partners who request to participate in the assessment can evaluate their sustainability performance based on highly objective, reliable, and comparable assessment results.
For business partners who share their EcoVadis results with us , we introduce them to e-learning and other educational materials provided by EcoVadis depending on their scores, and ask them to re-take the assessment. 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 performance.
As an alternative option, we also utilize our own SAQ, which complies with our Code and the principles of the PSCI, a non-profit organization consisting of global pharmaceutical companies. This SAQ includes questions related to matters such as management systems, occupational health and safety, human rights, the environment, ethics, information security, and the sustainable procurement of materials, among others.
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| FY 2021 | FY 2022 | FY 2023 | FY 2024 | |
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| Risk Assessment |
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By FY2024, we selected 426 important business partners (77% of transaction value) and promoted activities. Furthermore, with regard to active pharmaceutical ingredients (APIs) and formulations indispensable for the manufacture of pharmaceuticals, which are the most important products for our line of business, we have started carrying out activities for our secondary business partners of products with the highest sales value. As a result, consent forms were collected from 333 companies, and risk assessments were conducted and responses were received from 238 companies. Furthermore, we conducted on-site audits for three business partners whose EcoVadis score did not meet our standards. We have confirmed that there is no need for corrective action plans and have requested our business partners to further improve their sustainability performance, a request to which they agreed to.
| FY2021-FY2024 progress (as of the end of March 2025) |
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|---|---|
| Number of companies subject to consent form | 426 companies |
| Number of companies submitting consent | 333 companies |
| Number of companies subject to risk assessment | 259 companies |
| Number of companies participating in risk assessment | 238 companies |
| Number of companies that have conducted on-site audits | 3 company |
| Number of companies requested corrective actions | 0 company |
| （Number of companies discontinued based on audit results） | 0 company |
In FY2023, we conducted an e-learning course for all employees to promote a better understanding of sustainable procurement. The aim of this e-learning course was to disseminate the importance of, and our way of thinking regarding, sustainable procurement.This e-learning course is posted on our internal website so that all of our employees can access it at any time.
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 sustainable procurement 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.