Penfabric Sdn. Berhad has introduced a Supplier Code of Conduct outlining 27 guidelines that suppliers are expected to adhere to. The guidelines range in topic from prohibiting child labor and slavery to protecting freedom of association and prohibiting anti-competitive practices.
Facilitating CSR Initiatives Throughout the Supply ChainToray Group's Socially Responsible Procurement, Purchasing and Distribution
Implementing CSR Procurement
Percentage of responses to CSR procurement survey requests from corporate customers
Reporting scope: Toray
Fiscal 2016 target:
Percentage of major suppliers and business partners practicing CSR procurement
Reporting scope: Toray
Fiscal 2016 target:
90% or higher
Toray operates corporate rules for socially responsible procurement and has a framework in place to rapidly and precisely respond to customer inquiries on Toray's materials and CSR practices. Information on customers and suppliers is centrally managed in a shared database.
Toray conducts regular questionnaire surveys to monitor socially responsible practices at suppliers, as part of a plan-do-check-action (PDCA) cycle to encourage socially responsible practices in supply chains.
PDCA Cycle for Supply Chain Management
Surveying Suppliers about CSR
Toray asks its main suppliers and subcontractors to practice CSR procurement, targeting 90% compliance among business partners. Toray conducts a biannual survey on socially responsible practices, targeting major suppliers, manufacturing subcontractors, and sales agents who represent 90% of Toray's procurement by value. In fiscal 2016, Toray asked to survey 526 companies. The survey provides a comprehensive picture of socially responsible practices and includes questions specifically related to Toray Group's CSR Procurement Guidelines. The survey also gauges attitudes on areas of increased concern, such as biodiversity conservation and conflict minerals.
CSR Survey Results Analysis and Feedback
The survey conducted in fiscal 2016 found that 94% of companies surveyed were rated "excellent," "very good" or "good" for CSR practices, thus meeting the Group's standards for business partners. Six percent of the companies surveyed rated only "fair" or "needs improvement," requiring further investigation of their CSR practices.
The percentage of companies rating "excellent," "very good" or "good" was up six percentage points from the previous survey conducted in fiscal 2013. This confirms that business partners are making progress in implementing CSR practices. However, the average rating for implementing CSR in the supply chain was low.
Ten companies rated "fair" or "needs improvement" in the previous survey, necessitating visits to discuss improvements. Consequently, all 10 companies rated "good" or higher in the fiscal 2016 survey, showing measurable progress in implementing CSR practices. The Group provided the survey results and its analysis to business partners as a form of feedback.
- CSR Status of Suppliers
- Analysis of Survey Results
Socially Responsible Procurement Initiatives throughout the Supply Chain
In fiscal 2010, Toray included conditions regarding social responsibility in its basic supplier agreement for the first time. Then, in fiscal 2016, seeking to keep adding new suppliers, Toray again updated its policy, making it mandatory to include CSR clauses in contracts with distribution companies. These clauses are now included in all new and renewed contracts.
Human Rights and Supply Chains
Toray Group's CSR Procurement Guidelines mandate a commitment to respect human rights in procurement. Toray also works with suppliers to promote human rights in supply chains.
Addressing Conflict Minerals
The U.S. Securities and Exchange Commission (SEC) has issued rules requiring companies to disclose their use of conflict minerals. To comply with the rules, Toray investigates the use of conflict minerals in all products offered by the Toray Group, as part of its supply chain management. If conflict minerals are used, Toray investigates the suppliers to determine the mining operations and geographic source of the minerals.
International Cooperation in the Textiles and Apparel Industry
The Toray Group is a member of the Sustainable Apparel Coalition, together with other apparel manufacturers and retailers from around the globe. The coalition is dedicated to reducing the environmental impact of apparel and footwear products, and improving human rights for workers.
Follow-up Visits to Companies, Based on the Results of CSR Survey for Suppliers
Meeting to discuss a supplier's results on the CSR survey
Companies that score "fair" or "needs improvement" necessitate a visit to discuss changes and improvements. The Group also engages stakeholders in dialogue such as interviewing members of the community. For example, companies that operate manufacturing or production facilities in residential areas are encouraged to enhance their community relations by inviting residents to visit their facilities and implementing local cleanup activities.
CSR Procurement at Group Companies in Japan
Percentage of group companies that have implemented the CSR procurement framework
Reporting scope:Toray Group (Japan)
Fiscal 2016 target:
In fiscal 2014, the Toray Group achieved its target of ensuring that all group companies in Japan have a CSR procurement framework in place. A full 100% of group companies in Japan conducted CSR surveys of suppliers in fiscal 2015. The Group will continue to work to raise awareness of social responsible procurement and enhance these initiatives.
CSR Procurement at Group Companies Outside Japan
Group companies outside of Japan in the fibers & textiles business began surveying their subcontract manufacturers in fiscal 2016, to prioritize socially responsible procurement. Group companies outside Japan in other industries will also begin surveying their subcontractors in the future, aiming to support the practice of socially responsible procurement that reflects local circumstances and conditions.