Sustainable Procurement

We at the Kyowa Kirin Group are promoting Sustainable procurement across the entire supply chain by ensuring that our suppliers understand and cooperate with our initiatives.
To ensure a stable supply of high-quality products, we are working to conduct open and fair Sustainable procurement. As part of our efforts, we stipulate the Kyowa Kirin Group Procurement Policy^*1, which manifests our determination to promote Sustainable procurement in collaboration with suppliers.
Growing importance of sustainable procurement, we have revised the Kyowa Kirin Group Supplier Code of Conduct^*2 in accordance with international standards, laws, and regulations and have posted it on this website as requirements to adhere by throughout our supply chain.
We at the Kyowa Kirin Group expect our suppliers to comply with applicable international standards, laws, and regulations, and to adhere to the Kyowa Kirin Group Supplier Code of Conduct.
The Kyowa Kirin Group will conduct evaluations of suppliers' adherence to the Kyowa Kirin Group Supplier Code of Conduct and seek cooperation from suppliers, including corrective action, for any issues identified.
The Kyowa Kirin Group is willing to work with suppliers who are willing to improve identified issues, to ensure a stable supply of high-quality products.

For the Kyowa Kirin Group’s procurement activities, we have in place the Kyowa Kirin Group Procurement Policy, based on which we aim to forge long-term relationships of trust with our suppliers and together fulfill our corporate social responsibility by complying with all related laws, regulations and rules, and striving to engage in fair, just and open procurement activities.

It is important for the entire supply chain to understand this Kyowa Kirin Group Supplier Code of Conduct and act accordingly to realize sustainable procurement.
We ask suppliers who have received this Kyowa Kirin Group Supplier Code of Conduct to communicate the code to the people not only in their own company but also to their suppliers, to implement appropriate resource allocation and to organize appropriate systems, procedures, and processes. Suppliers shall properly investigate concerns relating to this Kyowa Kirin Group Supplier Code of Conduct and take corrective actions, as appropriate.
In addition, suppliers are requested to manage their own efforts through their own management systems so that the entire supply chain can contribute to realizing a sustainable society. We would appreciate the cooperation of all suppliers.

Kyowa Kirin Group Supplier Code of Conduct (full text)

The promotion of sustainable procurement is a universal challenge for the Kyowa Kirin Group. Each company/department incorporates their own issues into their action plans and is advancing initiatives designed to resolve them. In addition, the Kyowa Kirin Group CSR Committee reports on the state of progress of those initiatives.
To ensure that all employees have a common understanding of the importance of practicing sustainable procurement, we regularly conduct training for all employees every year. Commenced in 2019, training for domestic Group companies is also ongoing, and overseas Group companies are conducting their own training.

The Kyowa Kirin Group implements supply chain risk management. To provide a stable supply of medicines, it is necessary to procure raw materials from suppliers in a stable manner.
We are conducting risk management by communicating our procurement policies to suppliers and obtaining external information, such as on the status of supplier sustainable activities and on the management stability of the suppliers themselves.

The Group accepts human rights-related complaints and reports from all stakeholders in its supply chain through the engagement and remedy platform provided by the Japan Center for Engagement and Remedy on Business and Human Rights (JaCER), which is based on the United Nations Guiding Principles on Business and Human Rights.
We are committed to resolving essential human rights issues by accepting complaints through a third party, thereby ensuring equality and transparency in the handling of complaints, and responding appropriately to complaints and whistleblowing. With respect to whistleblower's reports we receive, we will investigate the facts of the report, engage in necessary dialogue regarding the report, and implement corrective measures (including prevention of recurrence and response to objections).In responding to the whistleblower's report, the Company shall ensure that the whistleblower will not be disadvantaged and shall protect his/her personal information. Unless there is a justifiable reason to do so, such as when required by law, we will not use the information related to the case for any other purpose.
For whistleblowing through JaCER, information will be disclosed anonymously on JaCER's website on a regular basis.

We consider that, in order for Kyowa Kirin to conduct sound business activities and fulfill its social responsibility, it is essential that suppliers who are key partners should understand our CSR policy and cooperate in our CSR efforts.
We actively promote CSR procurement for mutual development, by conducting fair and open transactions with our suppliers and obtaining cooperation in a spirit of equal partnership.

At Kyowa Kirin, the following measures are carried out in each stage of transactions with suppliers.

Informing suppliers about our Sustainable Procurement practice.
Before entering into a new transaction with a supplier, we explain our Group Supplier Code of Conduct to the supplier and ask for their understanding and cooperation.
When a large number of new transactions are expected to occur at once, we also hold pre-transaction briefing sessions for new suppliers as needed (2018: Takasaki Plant; 2021: Briefing for a change in the procurement system).

We select suppliers in accordance with internal standards based on objective information.
For existing suppliers with whom we have an ongoing business relationship, we conclude a contract to ensure their compliance with the Kyowa Kirin Supplier Code of Conduct.

We monitor our suppliers' status based on objective indicators, assess risks, and conduct follow-up surveys on the suppliers according to the risks identified.
Since 2022, by designating certain suppliers who are subject to our supplier management, we actively collect information depending on the level of management.
For the managed suppliers, we conduct (1) questionnaire surveys on the status of their sustainable activities to identify issues in our supply chain and (2) supplier briefings as an opportunity to share issues and raise awareness.
If any concerns are identified at suppliers, we conduct follow-up surveys and site visits to monitor and inspect the status of how they have addressed the concerns. In the case of a particularly important concern, we review our transaction with the supplier based on preset criteria.
We check and share information on individual suppliers' sustainable-related issues by visiting them or holding face-to-face/online meetings.
Our procurement staff members also attend quality assurance inspections to check the suppliers' sites directly.

With regard to the topics covered in the Kyowa Kirin Group Supplier Code of Conduct, we annually conduct a survey to understand and analyze the sustainable activities under way in the supply chain and identify existing issues. The results of the questionnaire are provided to the respondent suppliers as feedback. We have also conducted surveys of overseas suppliers since 2019.

From the 2022 survey, we have changed the scope of the survey targets (respondents) by narrowing it down to selected suppliers based on the history of transactions with us, and as a result, we received responses from 430 companies.

Compared with the previous year, the percentage of respondents who responded positively to the questions (i.e., fulfilling the requirements) increased by five points or more in the following areas: (1) Environmental Preservation, (2) Development of Corporate Social Responsibility Policies, and (3) Anti-Harassment Measures. In addition, although the improvement rate did not reach five points, the survey results also showed improvement in the suppliers' Sustainable Initiatives with upstream suppliers, suggesting that the suppliers are promoting their own sustainable activities.
Regarding individual questionnaire items, there were no cases of improper transactions (i.e., bribery or relationships with antisocial forces). In the area of Legal Compliance, there were a few cases reported (i.e., concern of violation of the Subcontract Act and the Antimonopoly Act), but all of the suppliers who reported these concerns responded that they had implemented recurrence prevention measures, making us recognize that they are working as an organization to prevent further occurrences of such cases.
The area of Sustainable Initiatives with upstream suppliers has shown significant improvement, with positive responses exceeding 70% for the first time. Recognizing that sustainable issues are issues for the entire supply chain, we must continue our improvement efforts by widely linking our sustainable activities to upstream suppliers.
Respect for human rights is a universal issue. This category showed a positive response rate of 77.9% with four points improvement over the previous year, on the status of the suppliers' respect for human rights (formulation of policies to prevent forced labor and child labor). Policy development is the first step in working on respect for human rights and should be continued for further improvement.
In the category of Environmental Preservation, the positive response rates have increased significantly. We hope that the suppliers will continue their activities to promote environmental preservation. The status of green procurement (purchasing from companies actively working on the supply of environmentally friendly products and services, environmental considerations, etc.) has shown improvement, although the positive response rate is still barely above 70%. We hope that the suppliers will promote the procurement of environmentally friendly goods and services as part of their efforts to protect the environment.
The percentage of responding suppliers who have a Business Continuity Plan (BCP) in place has exceeded 90% for the first time, indicating that the importance of BCP has been recognized.
The survey results show that many suppliers have already implemented information security measures and countermeasures against cyberattacks, also making progress in responding to risks. However, although the numerical results are good, considering the number of cyberattacks and their increasingly sophisticated tactics, we need to continue such measures to achieve further improvement.

We held a supplier briefing to share information on issues and solutions throughout the supply chain in 2018.

In November 2023, we held a supplier briefing (in the form of a webinar), attended by 395 companies. The theme of this 2023 briefing was "Toward the Realization of Sustainable Procurement, in light of the evolution of the Kyowa Kirin Group's procurement practice, from "CSR Procurement" to "Sustainable Procurement. We held this briefing not only as a forum to explain the Kyowa Kirin Group's policies and initiatives but also as an opportunity to consider jointly with suppliers about how to respond to the recently growing social demands regarding human rights and the environment and how to promote sustainable procurement.

Kyowa Kirin also conducts human rights due diligence investigations of its suppliers.

In 2023, we conducted a survey regarding foreign technical interns of suppliers at the Takasaki Plant. As part of the survey, at a supplier already accepting technical interns (Shin-Nippon Wex Co., Ltd.), we conducted direct interviews with the management division and technical interns. As a result, we checked that there were no particular concerns about human rights violations as of that time, and we provided our survey reports to Shin-Nippon Wex as our feedback.

We will continue to investigate and evaluate human rights issues in our supply chain.

Kyowa Kirin Group reviews its sustainable activities, identifies issues that need to be solved, and works to make improvements with the cooperation of its suppliers. In particular, we intend to continue implementing anti-bribery and human rights due diligence, which are high-profile themes. We are also working on environmental preservation by recognizing issues and implementing activities that help prevent global warming.

Looking forward, we will continue our efforts to the entire Kyowa Kirin Group, further strengthen our collaboration with the entire supply chain, and actively push forward sustainable procurement with all our suppliers.