Supply chain management
Materiality
Related SDGs
Supply chain management
Materiality
Related SDGs
Our approach
In all of our business activities we must fulfill our social responsibilities as a corporate citizen by complying with laws, respecting human rights, considering the global environment and managing information securely.
To support the stable production and sale of products beneficial for health and activities toward a sustainable society, we view sustainable procurement as a key theme for our sustainability activities. We select our suppliers according to procurement cost criteria, raw material criteria and qualitative criteria, and promote risk management at these suppliers.
As sustainable procurement requires collective action with our business partners, we will communicate proactively and work together with partners, mitigating risks and considering social and environmental impact throughout the supply chain and improving the sustainability of society.
Message from the chief officer
Yasuyuki Suzuki
Director and Managing Executive Officer
Divisional General Manager of Production Division
Accurately grasping global trends and taking responsible action as a company
At the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP28) in December 2023, the participants assessed progress on measures to combat global climate change and called on the countries of the world to promote efforts to bring about a decarbonized society.
However, ongoing instability and confusion in the international situation continue to drive procurement costs up and create a wide variety of other impacts and limitations that affect how companies procure their raw materials. Discussions on how to address the problems tied to supply chain sustainability, including important themes like climate change, deforestation, biodiversity and human rights, are gaining momentum worldwide. As society pays closer attention to the issues at hand, expectations for progress are growing—and so is the need for corporate responsibility.
At the Yakult Group, which upholds supply chain management as one of its material themes, we know that we will need to stay abreast of global trends and work together with our suppliers as we take further action to increase environmental and social sustainability.
Striving for sustainable raw material procurement
The Yakult Group aims to eliminate deforestation, a serious environmental issue for the supply chain, from its raw material procurement activities. In fiscal 2022, we formulated our Deforestation and Conversion Free (DCF) Commitment to Responsible Sourcing to help guide sustainable procurement.
One of the specific goals of this commitment is establishing traceability that allows us to identify risks by detailing the production of raw materials all the way to their source and to implement approaches to resolving any issues. To help do so, we conducted a traceability survey in fiscal 2023 on five key raw materials. We are now drawing on the results of the survey and other resources to get a clearer picture of the Group’s current situation and explore approaches to solutions.
We are also taking steps in relation to palm oil, which is associated with considerable sustainable procurement risks. In fiscal 2023, we joined the Roundtable on Sustainable Palm Oil (RSPO) as well as the Japan Sustainable Palm Oil Network (JaSPON), which engages in activities to promote sustainable procurement and consumption of palm oil in the Japanese market, in hopes of accelerating our sustainable procurement efforts. Going forward, we will disclose information about our use of palm oil and promote appropriate palm oil procurement.
Providing information in compliance with global frameworks
The Yakult Group is committed to not only promoting sustainable procurement activities but also appropriately disclosing information on the progress of those efforts to its stakeholders. As part of that commitment, we operate global information-disclosure systems for environmental topics such as climate change, water and forests. We also disclose information to CDP, an international NGO that continues to garner significant attention among investors and ranking agencies.
Working together with suppliers
Because the process of developing solutions to environmental and social issues on the supply chain hinges on collaboration with suppliers, we conduct supplier briefings on sustainable procurement, meetings with suppliers, and other engagement activities. We will leverage these efforts into concrete action for solving issues by continuing to dialogue with our suppliers, communicating our views and goals and sharing information on relevant measures.
November, 2024
Yakult Group CSR Procurement Policy
Basic policy on
sustainable procurement
Yakult Group CSR Procurement Policy
Recognizing the importance of sustainable procurement that takes into consideration issues such as human rights, labor, the environment, and anti-corruption, the Yakult Group will promote sustainable procurement throughout the supply chain, in cooperation with our business partners.
1 Respect regulatory compliance and international codes of conduct
We will comply with national and local laws and regulations, respect international codes of conduct, and promote fair and equitable procurement activities.
2Consider human rights, labor, safety and health
We will prohibit the use of child labor and forced labor, respect fundamental human rights, and promote procurement activities that take into consideration the work environment, safety and health.
3 Ensure safety and quality
We will promote procurement activities, giving attention to cost and stable supplies, and aim to ensure high quality and safety.
4 Consider the global environment
We will promote procurement activities that comply with the Yakult Basic Policy on the Environment and take into consideration the global environment.
5 Maintain information security
We will strictly control confidential information on procurement transactions and use it only for legitimate purposes.
6Coexist with society
We will promote procurement activities that take into consideration social contributions towards coexistence with society.
(Established in March 2018)
Yakult Group Supplier CSR Guidelines
Based on the CSR Procurement Policy, the Yakult Group Supplier CSR Guidelines were formulated in July 2020 in order to effectively promote sustainable procurement within the Group and help create a sustainable society. The guidelines are a collection of requirements regarding responsible procurement activities for all our business partners in Japan and overseas, including new business partners.
In order to ensure adherence to these guidelines, we hold a briefing for suppliers on our CSR Procurement Policy during which we explain the contents of the guidelines. In addition, for each requirement in the guidelines, we check the status of supplier efforts through surveys and audits, and if any problems are found, we take action aimed at improvement.
Together with using these guidelines, the entire Yakult Group will continue striving to promote sustainable procurement.
Working with our suppliers to promote sustainable procurement
The Yakult Group promotes sustainable procurement, which takes into consideration such issues as human rights, labor, the environment and anticorruption in the supply chain, and positions it as a key theme in the stable production and sale of products that help promote good health and the creation of a sustainable society. By communicating actively to achieve effective collaboration with our suppliers, we aim to improve the sustainability of society by taking our environmental and social impact into consideration and reducing risks throughout the supply chain.
- Click here to “Working with suppliers toward sustainable procurement”
Working with suppliers toward sustainable procurement
Deforestation and Conversion Free (DCF) Commitment to Responsible Sourcing
The planet's environment is at risk due to global warming, environmental pollution, loss of biodiversity and depletion of natural resources. Based on the Commitment, we will pursue our business activities while considering the planet's environment and the lives and human rights of the people supported by the environment, and to create a society where people and the planet can coexist forever.
We have identified raw materials at risk of deforestation in our supply chain and are committed to promoting sustainable procurement of these materials, setting out our basic policy, initiatives and targets.
Initiatives and Targets/KPIs
We identify pulp and paper, palm oil, soy and dairy products (e.g. skim milk powder) as raw materials with a high-risk of deforestation, set Targets and KPIs for their sustainable procurement, and promote responsible procurement in our supply chain.
*The quantitative Targets and KPIs will be reviewed and updated as appropriate to improve ongoing efforts in the Commitment.
| Scope | All consolidated sites in Japan and overseas involved in the procurement of raw materials to produce food and beverages, pharmaceuticals and cosmetics for the Yakult Group |
|---|
| Commodities | Target fiscal year | Quantitative targets |
|---|---|---|
| Pulp and paper | 2025 | 100% of the pulp and paper procured for paper containers and packaging to be switched to internationally certified materials such as FSC® or recycled paper |
| Palm oil | 2025 | 100% of palm oil procured to be switched to RSPO-certified products (MB and above) |
| 2030 | 100% traceability of palm oil procured as a primary raw material back to the agricultural origin of its production | |
| Soybeans | 2030 | 100% traceability of soybean procured as a primary raw material back to the agricultural origin of its production |
| Dairy products | 2030 | 100% traceability of dairy products (e.g., skim milk powder) back to the source, such as the dairy farmer, in collaboration with suppliers |
Progress report on the DCF Commitment
The Yakult Group is taking initiatives to verify Deforestation and Conversion Free in its supply chain.
Explainer video related to the Commitment
- Click here for the explainer video related to the Commitment.
×The explainer video related to Yakult's Deforestation Free Commitment
Main initiatives
Raw material risk management： Joining RSPO and JaSPON
Under our Deforestation and Conversion Free (DCF) Commitment to Responsible Sourcing, established in fiscal 2022, we are taking measures to ensure sustainable procurement of palm oil, a raw material associated with a high risk of deforestation, which include switching to products with third-party certification and monitoring traceability.
In fiscal 2023, to further our progress on sustainable procurement of palm oil, we joined the Roundtable on Sustainable Palm Oil (RSPO), an international initiative focused on the sustainable use of palm oil. Going forward, we will disclose information about our use of palm oil and promote appropriate palm oil procurement.
Additionally, in fiscal 2023, we joined the Japan Sustainable Palm Oil Network (JaSPON), which engages in activities to promote sustainable procurement and consumption of palm oil in the Japanese market. Information gathered through networking with experts and other companies in the same industry will help us stay current with the latest trends and monitor effective measures as we work toward fulfilling our DCF Commitment to Responsible Sourcing.
Supplier risk management：Towards reducing sustainability risks among our suppliers
Based on our CSR Procurement Policy, we carry out supplier risk assessments using an international data sharing platform that Sedex* provides and a sustainable procurement survey in order to identify high-risk suppliers concerning relevant issues, such as the environment, human rights, occupational health and safety, and anti-corruption. The fiscal 2023 survey was carried out for 253 business partners in Japan according to the selection criteria below, accounting for the top 90% of our suppliers ranked by total procurement cost related to manufacturing.
In consideration of the aforementioned results, we carefully select business partners, identify their challenges, and explore appropriate measures. We also engage in on-site visits to enhance engagement.
* A membership organization that provides an international data sharing platform aimed at responsible procurement
Supporting communities with local employment and sourcing
To contribute to the sustainable development of the countries and regions where we operate, we conduct our global business with a local focus based on local production and sales using raw materials that can be stably procured and satisfy our product quality and safety standards.
Yakult currently operates in 40 countries and regions including Japan, with 29 overseas companies. We have established sales offices and production plants with deep ties to local communities, and actively hire local employees.
Percentage of locally sourced raw materials for dairy products（fiscal 2023）
* Results for dairy product raw materials
Note: Raw materials that are imported and undergo final processing in Japan are calculated as local Japanese materials.
Special
Report
Report from the Frontlines
Promoting sustainable procurement through collaboration with our suppliers: CSR Promotion Section, Public Relations Department
Promoting sustainable procurement through collaboration with our suppliers: CSR Promotion Section, Public Relations Department
We have held CSR Procurement Policy briefings annually for our suppliers since fiscal 2021. These briefing sessions help us promote effective sustainable procurement while building stronger communication with our suppliers and developing a shared understanding of issues related to sustainable procurement. In this article, one of our managers explains more about these sustainable procurement efforts.
Why does Yakult engage in sustainable procurement?
In all of our business activities, we must fulfill our social responsibilities by complying with laws and regulations, considering the global environment, respecting human rights and managing information securely. To ensure that Yakult meets these social expectations, we communicate proactively with suppliers and work together to consider social and environmental impacts and mitigate risks throughout the supply chain in our efforts to improve sustainability of society.
Our suppliers’ understanding and cooperation are particularly essential to our initiatives that contribute to environmental and social sustainability. The Yakult Group sees supply chain management as a material issue, and the promotion of sustainable procurement occupies a place of critical importance within our sustainability and sustainable activities. We select our suppliers according to procurement cost criteria, raw material criteria and other qualitative criteria, and thereby promote risk management among these suppliers.
For major business partners like raw material suppliers and manufacturing subcontractors, we offer explanatory seminars to explain the Yakult Group CSR Procurement Policy, and have conducted a CSR procurement survey since 2019 to encourage self-evaluation. In an effort to provide all suppliers with more easily understandable explanations of our policies and initiatives, in fiscal 2021 we began holding CSR Procurement Policy briefings for suppliers.
Helping suppliers understand Yakult more deeply through briefings
At our CSR Procurement Policy briefings for suppliers, we share information on supply chain management and initiatives that contribute to sustainability, as well as provide support activities aimed at raising awareness and building capacity related to sustainable. As we prepare for these briefings, our greatest concern is finding, compiling and delivering useful information for our suppliers. Our approach to each briefing involves listening to feedback from suppliers and people from related departments within Yakult, and organizing these observations in order to provide information and initiatives that will help resolve on-site concerns and issues.
The third briefing, held in December 2023, was attended by approximately 440 people from 160 companies that supply and sell raw materials to Yakult Honsha. Some 40 people from related departments within Yakult participated as well.
During the briefing we covered topics such as the Yakult Group CSR Procurement Policy and the results of the year’s CSR procurement survey, along with current challenges and how we plan to approach resolving them. After that, a representative from Sedex, a membership organization that provides an international sustainable procurement data-sharing platform, gave a presentation on the Sedex organization and the benefits of using the platform. Outside experts and our company’s CSR Promotion Section General Manager also shared information about the creation of promotional systems and specific measures around sustainable procurement, along with advice for resolving the challenges and concerns facing our suppliers. Finally, our Purchasing Department General Manager, our Development Department General Manager and our CSR Promotion Section General Manager took the stage together to answer a series of questions.
Participants remarked that the briefing gave them a deeper understanding of Yakult’s policies and initiatives and the necessity of efforts to respect human rights through the use of the Sedex platform, and that it provided them with information that would be useful for their future initiatives. Our suppliers also expressed concern about the creation of systems for promoting sustainability, noting the difficulty of building awareness throughout the supply chain. Recognizing that these concerns are similar to the ones our own company faces was an extremely important outcome.
The briefing was recorded and posted online so that the day’s events could be reviewed even by suppliers who were unable to attend. Moving forward, we will undertake concrete actions to address issues related to dialogue and support.
At the CSR Procurement Policy briefing for suppliers
Actions throughout the supply chain to realize good health for people and the planet.
We believe there are two reasons why communicating Yakult’s supply chain management initiatives to outside companies is meaningful.
The first reason is the impact this communication has on our suppliers. We view contributing to social and environmental sustainability as beneficial not just for Yakult but also for our suppliers. Since the understanding and cooperation of our suppliers are essential for achieving these goals, we see our sustainability briefings as important opportunities to share information.
The other reason is the effect that this communication has on related departments within Yakult. To communicate our stance to suppliers, naturally we must be unified as a company in our understanding and actions. Through repeated discussions with relevant departments, we are working to foster a sense of solidarity within the company and improve effectiveness as we put our corporate belief that “in order for people to be healthy, everything around them must also be healthy” into practice throughout the supply chain.
Employee Comment
Company: CSR Promotion Section, Public Relations Department, Yakult Honsha Co., Ltd.
Title: Assistant Manager
Name: Yuki Kamikubo
Employee Comment
I believe that the difficulties with sustainability-related work arise from the need to resolve issues throughout the entire supply chain. Seen another way, this is exactly what makes our work enjoyable and meaningful, since it has such a large impact and places on us such a great amount of responsibility. There are numerous challenges to overcome, but I believe these efforts will bear fruit in the smiling faces of the children of the future.
Sustainability
- Home
- / Sustainability
- / Social
- /
- Supply chain management
